Maryland § 2-303
Full text of Maryland Maryland Code § 2-303, with citation guidance and answers to common questions.
§ 2-303.
(a) (1) The entire consideration received by a corporation for issuing stock with par value constitutes stated capital to the extent of the aggregate par value of the stock.
(2) Any consideration received in excess of the aggregate par value constitutes capital surplus.
(b) (1) Except as permitted by paragraph (2) of this subsection, the entire consideration received by a corporation for issuing stock without par value constitutes stated capital.
(2) Before issuing stock without par value, the board of directors may allocate any portion of the consideration to capital surplus. However, if the stock has a preference in the assets of the corporation in the event of involuntary liquidation, the board may allocate to capital surplus only a portion which does not exceed the amount by which the consideration exceeds the aggregate amount of the preference.
(c) Subsections (a)(2) and (b) of this section do not affect a good faith allocation of amounts to retained earnings, earned surplus, or a similar account if:
(1) Stock is issued in a consolidation, merger, or acquisition of all or substantially all of the stock or assets of another corporation; and
(2) Immediately after the transaction, the aggregate retained earnings, earned surplus, or similar account of the corporation which issued the stock does not exceed the aggregate of the corresponding accounts of the corporations parties to the transaction as they existed immediately before the transaction.
Frequently Asked Questions About Maryland § 2-303
What does Maryland Code § 2-303 cover?
Section 2-303 is part of the Maryland Code, the codified statutory law of Maryland. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Maryland § 2-303?
A common citation format is "Maryland Code § 2-303" (Maryland). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Maryland law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Maryland official source linked on this page or consult a licensed Maryland attorney.
How does Maryland § 2-303 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Maryland can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Maryland.