Section 2-216 - Prohibited acts; penalty. - Maryland Statutes

§ 2-216. Prohibited acts; penalty.
 

(a)  Prohibited acts.- A director or officer of a corporation may not knowingly and willfully: 

(1) Authorize or consent to the issuance of unauthorized stock or convertible securities of the corporation; 

(2) Authorize or consent to the issuance of stock or convertible securities of the corporation except in conformity with the provisions of law which relate to the issuance; or 

(3) Falsely make or consent to the making of any required entry in the books of the corporation with respect to the issuance of stock or convertible securities of the corporation. 

(b)  Effect of board or charter determination.- In the absence of actual fraud in the transaction, a determination by the board of directors or a statement in the charter as to the actual value of consideration other than money for which stock or convertible securities are to be issued or as to the propriety of accepting that consideration for issuing the stock or convertible securities is conclusive for all purposes. 

(c)  Penalty.- An officer or director who violates any provision of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $5,000 or imprisonment not exceeding two years or both. 
 

[An. Code 1957, art. 23, § 63; 1975, ch. 311, § 2; 1976, ch. 567, § 2.]