1670

LAWS OF MARYLAND

[Ch. 311

A CLOSE CORPORATION SHALL HAVE AT LEAST ONE DIRECTOR
UNTIL AN ELECTION BY THE CORPORATION IN ITS CHARTER TO
HAVE NO BOARD OF DIRECTORS BECOMES EFFECTIVE.

REVISOR'S NOTE: This section presently appears as
the introductory clause of Art. 23, §105(a)
and is reworded for clarity.

The only changes are in style.

For provisions dealing with the effective date
of an election to have no board of directors,

see §4-302.

4-302. ELECTION TO HAVE NO BOARD OF DIRECTORS.

(A)   EFFECTIVE TIME OF ELECTION.

AN ELECTION TO HAVE NO BOARD OF DIRECTORS BECOMES
EFFECTIVE AT THE LATER OF:

(1)    THE TIME THAT THE ORGANIZATION MEETING
OF DIRECTORS AND THE ISSUANCE OF AT LEAST ONE SHARE OF
STOCK OF THE CORPORATION ARE COMPLETED;

(2)    THE TIME THE CHARTER DOCUMENT IN WHICH
THE ELECTION IS MADE BECOMES EFFECTIVE; OR

(3)    THE TIME SPECIFIED IN THE CHARTER
DOCUMENT IN WHICH THE ELECTION IS MADE.

(B)   CESSATION OF DIRECTOR'S STATUS.

A DIRECTOR AUTOMATICALLY CEASES TO BE A DIRECTOR
WHEN AN ELECTION TO HAVE NO BOARD OF DIRECTORS BECOMES
EFFECTIVE.

REVISOR'S NOTE: This section presently appears as
Art. 23, §105(b).

The only changes are in style.

4-303. EFFECT OF ELECTION TO HAVE NO BOARD OF DIRECTORS.

IF THERE IS AN ELECTION TO HAVE NO BOARD OF
DIRECTORS:

(1)    THE STOCKHOLDERS SHALL MANAGE THE BUSINESS AND
AFFAIRS OF THE CORPORATION BY THEIR DIRECT ACTION AND MAY
EXERCISE ALL POWERS OF DIRECTORS;

(2)    THE STOCKHOLDERS OF THE CORPORATION ARE
RESPONSIBLE FOR TAKING ANY ACTION REQUIRED BY LAW TO BE
TAKEN BY THE BOARD OF DIRECTORS;