Section 12-207 - Governing instrument. - Maryland Statutes

§ 12-207. Governing instrument.
 

(a)  Binding effect; contents generally.- A governing instrument may: 

(1) Provide that a person shall become a beneficial owner and shall become bound by the governing instrument if the person, or a representative authorized by the person orally, in writing, or by other action such as payment for a beneficial interest, complies with the conditions for becoming a beneficial owner set forth in the governing instrument or any other writing and acquires a beneficial interest; 

(2) Consist of one or more agreements, instruments, or other writings and may include or incorporate bylaws containing provisions relating to the business of the statutory trust, the conduct of its affairs, and its rights or powers or the rights or powers of its trustees, beneficial owners, agents, or employees; and 

(3) Contain any provision that is not inconsistent with law or with the information contained in the certificate of trust. 

(b)  Specific contents.- A governing instrument may contain any provision relating to the management of the business and affairs of the statutory trust, and the rights, duties, and obligations of the trustees, beneficial owners, and other persons, which is not contrary to any provision or requirement of this title and, without limitation: 

(1) May provide for classes, groups, or series of trustees, beneficial owners, or beneficial interests, having the preferences, rights, powers, and duties as the governing instrument may provide, and may provide for the future creation of additional classes, groups, or series of trustees, beneficial owners, or beneficial interests, having the preferences, rights, powers, and duties as may from time to time be established, including preferences, rights, powers, and duties senior or subordinate to, or on parity with, existing or future classes, groups, or series of trustees, beneficial owners, or beneficial interests; 

(2) May establish or provide for the establishment of designated classes, groups, or series of trustees, beneficial owners, or beneficial interests having the preferences, rights, powers, and duties as the governing instrument may provide with respect to specified property or obligations of the statutory trust or profits and losses associated with specified property or obligations and, to the extent provided in the governing instrument, any classes, groups, or series of trustees, beneficial owners, or beneficial interests may have a separate business purpose or investment objective; 

(3) May provide for the division of beneficial interests in the statutory trust into a fixed or unlimited number of shares or other units or the combination of shares or other units of beneficial interests in the statutory trust; 

(4) May provide for the taking of any action, including the amendment of the governing instrument, the accomplishment of a merger or consolidation, the appointment of one or more trustees, the sale, lease, exchange, transfer, pledge, or other disposition of all or any part of the assets of the statutory trust or the assets of any series, the dissolution of the statutory trust, or the creation, under the provisions of the governing instrument, of a class, group, or series of beneficial interests that was not previously outstanding, in any such case without the vote or approval of any particular trustee or beneficial owner, or class, group, or series of trustees or beneficial owners; 

(5) May grant to, or withhold from, all or certain trustees or beneficial owners, or a specified class, group, or series of trustees or beneficial owners, the right to vote, separately or with any or all other classes, groups, or series of trustees or beneficial owners, on any matter, such voting being on a per capita, number, financial interest, class, group, series, or any other basis; 

(6) May, if and to the extent that voting rights are granted under the governing instrument, set forth provisions relating to notice of the time, place, or purpose of any meeting at which any matter is to be voted on, waiver of any such notice, action by consent without a meeting, the establishment of record dates, quorum requirements, voting in person, by proxy, or in any other manner, or any other matter with respect to the exercise of the right to vote; 

(7) May provide for the present or future creation of more than one statutory trust, including the creation of a future statutory trust to which all or any part of the assets, liabilities, profits, or losses of any existing statutory trust will be transferred, and for the conversion of beneficial interests in an existing statutory trust or series, into beneficial interests in the separate statutory trust or series; 

(8) May provide for the appointment, election, or engagement, either as agents or independent contractors of the statutory trust or as delegates of the trustees, officers, employees, managers, or other persons who may manage the business and affairs of the statutory trust and may have the titles and the relative rights, powers, and duties as the governing instrument shall provide; 

(9) May provide rights to any person, including a person who is not a party to the governing instrument, to the extent set forth in the governing instrument; 

(10) May provide for the manner in which the governing instrument may be amended, including by requiring the approval of a person who is not a party to the governing instrument or the satisfaction of conditions, and to the extent the governing instrument provides for the manner in which it may be amended, the governing instrument may be amended only in that manner or as otherwise permitted by law, provided that the approval of a person may be waived by the person and that conditions may be waived by all persons for whose benefit the conditions were intended; and 

(11) May provide for action by or on behalf of the statutory trust in the event there are no trustees. 

(c)  Statutory trust.-  

(1) A statutory trust is not required to execute its governing instrument. 

(2) A statutory trust is bound by its governing instrument whether or not it executes the governing instrument. 

(3) A beneficial owner or a trustee is bound by the governing instrument whether or not the beneficial owner or trustee executes the governing instrument. 
 

[1999, ch. 452; 2000, ch. 61, § 1; 2010, ch. 611, § 1.]