# Corporations and Associations (GCA) ## Title 12. Statutory Trusts ### Subtitle 1. Definitions; General Provisions #### Section 12-101 (a) In this title the following words have the meanings indicated. (b) "Beneficial owner" means any owner of record of a beneficial interest in a statutory trust, the fact of ownership to be determined and evidenced, whether by means of registration, the issuance of certificates or otherwise, in conformity to the applicable provisions of the governing instrument of the statutory trust. (c) "Foreign business entity" means: (1) A foreign statutory trust; or (2) A corporation, general or limited partnership, common-law trust, limited liability company, real estate investment trust, or any other unincorporated business formed, organized, or existing under the laws of another state, the United States, a foreign country, or other foreign jurisdiction. (d) "Foreign statutory trust" means a trust that is: (1) Formed under the laws of another state, the United States, a foreign country, or other foreign jurisdiction; and (2) Required by the laws of the jurisdiction in which it is formed to file a record with a public official in that jurisdiction. (e) "Governing instrument" means a declaration of trust or other trust instrument which provides for the governance of the affairs of a statutory trust and the conduct of its business. (f) (1) "Other business entity" means a corporation, a general or limited partnership, a common-law trust, a limited liability company, a real estate investment trust, or any other unincorporated business. (2) "Other business entity" does not include a statutory trust. (g) "Person" means a natural person, partnership, limited partnership, limited liability company, trust, estate, association, corporation, custodian, nominee, or any other individual or entity in its own or any representative capacity. (h) (1) "Statutory trust" means an unincorporated business, trust, or association that is: (i) Formed by filing an initial certificate of trust under Sec. 12-204 of this title; and (ii) Governed by a governing instrument. (2) "Statutory trust" includes a trust formed under this title on or before May 31, 2010, as a business trust, as the term business trust was then defined in this title. (i) (1) "Trustee" means the person appointed as a trustee in accordance with the governing instrument of a statutory trust. (2) "Trustee" may include a beneficial owner of a statutory trust. #### Section 12-101.1 The use of the designation "business trust" or a statement in a certificate of trust or governing instrument executed on or before May 31, 2010, to the effect that a trust is or will qualify as a Maryland business trust within the meaning of or in accordance with this title may not create a presumption or an inference that the trust is a business trust for purposes of Title 11 of the United States Code. #### Section 12-102 (a) Except as provided in the governing instrument of a statutory trust or in this title, the laws of this State pertaining to trusts are hereby made applicable to statutory trusts. (b) For purposes of any tax imposed by the Tax - General Article, a statutory trust shall be classified as a corporation, an association, a partnership, a trust, or otherwise, as shall be determined under the United States Internal Revenue Code of 1986, as amended, or under any successor provision. (c) Any statutory trust qualifying as a real estate mortgage investment conduit under Sec. 860D of the Internal Revenue Code or any successor provision shall be exempt from income tax except with respect to that portion of its income that is subject to federal income tax. #### Section 12-103 A statutory trust established in accordance with the provisions of this title is a separate legal entity. #### Section 12-104 This title may be cited as the "Maryland Statutory Trust Act". #### Section 12-105 (a) This title shall be liberally construed to give maximum effect to the principle of freedom of contract and to the enforceability of governing instruments. (b) The presumption that a civil statute in derogation of the common law is construed strictly does not apply to this title. ### Subtitle 2. Formation and Powers #### Section 12-201 (a) Except as provided in subsection (b) of this section, a statutory trust may carry on any lawful business for any purposes. (b) A statutory trust may not carry on the business of: (1) Granting policies of insurance or assuming insurance risks; or (2) Banking. (c) Except as provided in its certificate of trust or governing instrument, a statutory trust has the general powers, whether or not the general powers are set forth in its certificate of trust or governing instrument, to: (1) Sue, be sued, complain, and defend in all courts; (2) Have, use, alter, or abandon a trust seal; (3) Transact its business, carry on its operations, and exercise the powers granted by this article in any state, territory, district, and possession of the United States and in any foreign country; (4) Make contracts and guarantees, incur liabilities, and borrow money; (5) Sell, lease, exchange, transfer, convey, mortgage, pledge, and otherwise dispose of any or all of its assets; (6) Issue bonds, notes, and other obligations and secure the obligations by mortgage or deed of trust of any or all of its assets; (7) Acquire by purchase or in any other manner, and take, receive, own, hold, use, employ, improve, and otherwise deal with any interest in real or personal property, wherever located; (8) Purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, loan, pledge, or otherwise dispose of and otherwise use and deal in and with stock and other interests in and obligations of other business entities, other statutory trusts, and individuals; (9) Acquire its own shares of beneficial interest, bonds, notes, and other obligations and securities; (10) Invest its surplus funds, lend money from time to time in any manner that may be appropriate to enable the statutory trust to carry on its operations or fulfill the purposes specified in its governing instrument, and take and hold real and personal property as security for the payment of funds so invested or loaned; (11) Be a promoter, a partner, a member, an associate, or a manager of any partnership, joint venture, trust, or other enterprise; (12) Make gifts or contributions in cash, other property, or stock or other securities of the statutory trust to or for the use of: (i) The United States, this State, another state of the United States, a territory, possession, or district of the United States, or any institution, agency, or political subdivision of any of them; and (ii) Any governmental or other organization, whether inside or outside the United States, for religious, charitable, scientific, civic, public welfare, literary, or educational purposes; (13) Elect its officers and appoint its agents, define their duties, determine their compensation, and adopt and carry into effect employee and officer benefit plans; (14) Exercise generally the powers set forth in its governing instrument and those granted by law; and (15) Do every other act not inconsistent with law which is appropriate to promote and attain the purposes set forth in its governing instrument. #### Section 12-202 (a) Except as provided in its governing instrument, a statutory trust: (1) Shall have perpetual existence; and (2) May not be terminated or revoked by a beneficial owner or other person except in accordance with the terms of the governing instrument of the statutory trust. (b) Except as provided in the governing instrument of a statutory trust, the death, incapacity, dissolution, termination, or bankruptcy of a beneficial owner shall not result in the termination or dissolution of a statutory trust. #### Section 12-203 (a) A Maryland statutory trust shall have: (1) A principal office in this State; and (2) A resident agent. (b) (1) A statutory trust may designate or change its resident agent or principal office by filing for record with the Department a certified copy of a resolution of its trustees that authorizes the designation or change. (2) A statutory trust may change the address of its resident agent by filing for record with the Department a statement of the change signed by one of its trustees or by an officer of the statutory trust. (3) A designation or change of a statutory trust's principal office or its resident agent or its resident agent's address under this subsection is effective when the Department accepts the resolution or statement for record. (c) (1) A resident agent who changes the resident agent's name or address in the State shall notify the Department of the change by filing for record with the Department a statement of the change signed by the resident agent or on behalf of the resident agent. (2) The statement shall include: (i) The names of the statutory trusts for which the change is effective; (ii) The resident agent's old and new addresses or the resident agent's old and new names; and (iii) The date on which the change is effective. (3) If the old and new addresses of the resident agent are the same as the old and new addresses of the principal office of the statutory trust, the statement may include a change of address for the principal office if: (i) The resident agent notifies the statutory trust in writing that the statement will be filed; and (ii) The statement recites that the resident agent has done so. (4) The statement of the change of name or address of the resident agent or principal office of a statutory trust is effective when the Department accepts the statement for record. (d) (1) A resident agent may resign by filing with the Department a counterpart or photocopy of the resident agent's signed resignation. (2) Unless a later time is specified in the resignation, the resignation is effective: (i) At the time it is filed with the Department, if the statutory trust has appointed a successor resident agent; or (ii) 10 days after it is filed with the Department, if the statutory trust has not appointed a successor resident agent. (e) Service of process on a registered agent designated by a statutory trust under subsection (b) of this section shall be as effective as if served on one of the trustees of the statutory trust. #### Section 12-204 (a) (1) A certificate of trust filed by a statutory trust with the Department shall set forth: (i) The name of the statutory trust; (ii) The name and the business address of the resident agent; (iii) The address of the principal office of the statutory trust in the State; (iv) Any notice provided in accordance with Sec. 12-501(d) of this title; and (v) Any other matters the trustees determine to include in the certificate of trust. (2) A statutory trust is formed at the effective time of the filing of the initial certificate of trust with the Department as provided in subsection (e) of this section. (3) A certificate of trust shall be signed by all of the trustees. (b) (1) (i) Except as provided in the governing instrument or the certificate of trust of a statutory trust, a certificate of trust may be amended by filing a certificate of amendment to the certificate of trust with the Department. (ii) The certificate of amendment shall set forth: (1) The name of the statutory trust; and (2) The amendment to the certificate of trust. (2) A certificate of trust may be amended at any time for any purpose as the trustees may determine. (c) (1) Except as provided in the governing instrument or certificate of trust of a statutory trust, a certificate of trust may be: (i) Restated by integrating into a single instrument all the provisions of the certificate of trust that are then in effect as a result of there having been filed one or more certificates of amendment in accordance with subsection (b) of this section; and (ii) Amended or further amended by the filing of a restated certificate of trust. (2) The restated certificate of trust shall be specifically designated as a restated certificate of trust in its heading and shall set forth: (i) The present name of the statutory trust; (ii) The date of filing of the original certificate of trust with the Department; (iii) The information required to be included in accordance with subsection (a) of this section; and (iv) Any other information the trustees determine to include in the restated certificate of trust. (3) Except as provided in the governing instrument or certificate of trust of a statutory trust, a certificate of trust may be restated at any time for any purpose as the trustees may determine. (d) (1) A certificate of trust shall be canceled on the completion of winding up of the statutory trust and its termination. (2) A certificate of cancellation shall be filed with the Department and set forth: (i) The name of the statutory trust; (ii) The date of filing of its initial certificate of trust; and (iii) Any other information the trustees determine to include in the certificate of cancellation. (e) (1) Articles of merger or consolidation, a certificate of trust, a restated certificate of trust, a certificate of amendment, or a certificate of cancellation shall be effective: (i) When accepted for record by the Department; or (ii) At any later time specified in the articles or certificate. (2) If any articles or certificate filed in accordance with this section provides for a future effective time and if the transaction is terminated or amended to change the future effective time prior to the future effective time, the articles or certificate shall be terminated or amended by the filing, prior to the future effective time set forth in the original articles or certificate, of a certificate of termination or amendment of the original articles or certificate that: (i) Is executed and filed in accordance with this title; (ii) Identifies the original articles or certificate which has been terminated or amended; and (iii) States that the original articles or certificate has been terminated or amended. (f) The execution of articles or a certificate by a person in the manner provided in Sec. 12-205 of this subtitle constitutes an affirmation under the penalties for perjury that, to the best of the person's knowledge and belief, the facts stated in the articles or certificate are true. #### Section 12-205 (a) (1) Articles of merger or consolidation, a restated certificate of trust, a certificate of amendment, a certificate of cancellation, or an amendment of a certificate or articles shall be executed: (i) In the manner required by Sec. 1-301 of this article; or (ii) (1) By a person duly authorized by one or more of the trustees; or (2) If there is no trustee, as provided in the governing instrument of the statutory trust. (2) If articles of merger or consolidation or a certificate of termination or amendment of articles of merger or consolidation is being filed by another business entity or a foreign business entity, the articles of merger or consolidation or the certificate of termination or amendment of articles of merger or consolidation shall be executed by a person authorized to execute the articles or certificate on behalf of the other business entity or foreign business entity. (b) (1) An executed copy of each certificate required by this subtitle shall be filed with the Department. (2) The Department may not accept for record any certificate that does not meet the requirements of this subtitle. (3) The Department may not accept for record or filing any certificate or other document until all required fees have been paid to the Department. (c) When the Department accepts for record any certificate or any document designating or changing the name or address of a resident agent or principal office of a Maryland statutory trust, the Department shall promptly record the document. (d) The fact that a certificate of trust is on file in the office of the Department is notice: (1) That the entity formed in connection with the filing of the certificate of trust is a statutory trust formed under the laws of the State; (2) Of all other facts which are required to be set forth in a certificate of trust by Sec. 12-204 of this subtitle; and (3) Of the limitation on liability of a series of a statutory trust which is permitted to be set forth in a certificate of trust by Sec. 12-501(d) of this title. #### Section 12-206 The name of each statutory trust as set forth in its certificate of trust shall comply with the requirements of Title 1, Subtitle 5 of this article. #### Section 12-207 (a) 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) 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) (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. #### Section 12-208 Except as provided in the governing instrument of a statutory trust, the trustees shall elect the officers and appoint the managers, employees, and other agents of the statutory trust. ### Subtitle 3. Beneficial Owners #### Section 12-301 (a) (1) A person may become a beneficial owner of a statutory trust and may receive a beneficial interest in a statutory trust without payment of consideration to the statutory trust. (2) The consideration for a beneficial interest in a statutory trust may consist of: (i) Money; (ii) Tangible or intangible property; (iii) Labor or services actually performed for the statutory trust; (iv) A promissory note or other obligation for future payment of money; (v) The transfer of tangible or intangible property; (vi) A contract for future performance of labor or services; or (vii) Any combination of the consideration described in items (i) through (vi) of this paragraph. (b) Except as provided in the governing instrument of a statutory trust or by agreement between the beneficial owner and the statutory trust: (1) A beneficial owner is obligated to the statutory trust to perform any promise to contribute cash or property or to perform services, even if the beneficial owner is unable to perform because of death, disability, or any other reason; (2) Subject to the provisions of item (3) of this subsection, if a beneficial owner does not make the required contribution of property or services, the beneficial owner is obligated to the statutory trust to contribute cash equal to that portion of the agreed value, as stated in the records of the statutory trust, of the contribution that has not been made; and (3) The obligation provided in item (2) of this subsection shall be in addition to, and not in lieu of, any other rights, including the right to specific performance, that the statutory trust may have against the beneficial owner under the governing instrument or applicable law. (c) (1) A governing instrument may provide that the interest of any beneficial owner who fails to make any contribution that the beneficial owner is obligated to make shall be subject to specific penalties for, or specified consequences of, the failure. (2) The penalty or consequence may take the form of: (i) Reducing or eliminating the defaulting beneficial owner's proportionate interest in the statutory trust, subordinating the beneficial owner's interest to that of nondefaulting beneficial owners; (ii) A forced sale of the beneficial owner's interest; (iii) A forfeiture or cancellation of the beneficial owner's interest; (iv) A lending by other beneficial owners of the amount necessary to meet the defaulting beneficial owner's commitment; (v) A fixing of the value of the defaulting beneficial owner's interest by appraisal or by formula, and a redemption or sale of the defaulting beneficial owner's interest at that value; or (vi) Any other penalty or consequence. #### Section 12-302 (a) Except as provided in the governing instrument of a statutory trust, the beneficial owners shall be entitled to the same limitation of personal liability extended to stockholders of a Maryland corporation formed under Title 2 of this article. (b) (1) Neither an obligation of a beneficial owner or trustee of a statutory trust to the statutory trust arising under the governing instrument or a separate agreement in writing, or a note, instrument, or other writing evidencing any such obligation of a beneficial owner or trustee, shall be subject to the defense of usury. (2) A beneficial owner or trustee may not interpose the defense of usury with respect to any obligation identified in paragraph (1) of this subsection in any action. #### Section 12-303 (a) Except as provided in the governing instrument of a statutory trust, a beneficial owner shall have an undivided beneficial interest in the property of the statutory trust and shall share in the profits and losses of the statutory trust in the proportion of the entire undivided beneficial interest in the statutory trust owned by the beneficial owner. (b) (1) Except as provided in the governing instrument of a statutory trust, a beneficial owner has no interest in specific property of the statutory trust. (2) A creditor of the beneficial owner has no right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the statutory trust. (c) A beneficial interest in a statutory trust is personal property notwithstanding the nature of the property of the trust. (d) Except as provided in the governing instrument of a statutory trust, a beneficial interest in the statutory trust is freely transferable. (e) Except as provided in the governing instrument of a statutory trust, at the time a beneficial owner becomes entitled to receive a distribution, the beneficial owner has the status of, and is entitled to all remedies available to, a creditor of the statutory trust with respect to the distribution. (f) A governing instrument may provide for the establishment of record dates with respect to allocations and distributions by a statutory trust or for any other purpose. (g) Except as provided in the governing instrument of a statutory trust or by agreement, a beneficial owner shall have no preemptive right to acquire any beneficial interest or other interest in the statutory trust. #### Section 12-304 (a) Except as provided in its governing instrument, a statutory trust shall have the power to: (1) Indemnify and hold harmless, and to obligate itself to indemnify and hold harmless, any beneficial owner from and against any and all claims and demands whatsoever; and (2) Pay or reimburse in advance of final disposition of a proceeding, as defined in Sec. 2-418 of this article, any expenses incurred in connection with the proceeding. (b) The absence of a provision for indemnity in the governing instrument of a statutory trust may not be construed to deprive a beneficial owner of any right to indemnity that is otherwise available to the beneficial owner under the laws of the State. #### Section 12-305 (a) Except as provided in the governing instrument of a statutory trust, a beneficial owner, a holder of a voting trust certificate in the statutory trust, or a beneficial owner's agent may inspect and copy during usual business hours any of the following statutory trust documents: (1) The governing instrument and all amendments; (2) Minutes of the proceedings of the beneficial owners; (3) An annual statement of affairs; and (4) Voting trust agreements on file at the statutory trust's principal office. (b) (1) Except as provided in the governing instrument of a statutory trust, a beneficial owner, who for at least 6 months has been the beneficial owner of record of outstanding beneficial interests of any series or class of beneficial interests of the statutory trust entitled to cast at least 5% of all the votes entitled to be cast generally in the election of trustees, may present to any officer of the statutory trust a written request for a list of the beneficial owners of record of that series or class as disclosed by the records of the statutory trust relating to the issuance and transfer of beneficial interests. (2) Except as provided in the governing instrument of a statutory trust, within 20 days after a request for information is made under paragraph (1) of this subsection, the statutory trust shall prepare and have available on file at its principal office a list that: (i) Is verified under oath by one of its officers or its transfer agent or registrar; and (ii) Sets forth the name and address of each beneficial owner of record of the series or class and the number of shares of the series or class held by the beneficial owner. (c) Except as provided in the governing instrument of a statutory trust, each trustee shall have the right to examine all documents and information regarding the statutory trust for any purpose reasonably related to the performance of the trustee's duties as a trustee. (d) Except as provided in its governing instrument a statutory trust shall have the right to keep confidential from the beneficial owners, for such period of time as the trustees deem reasonable, any information that: (1) The trustees reasonably believe to be in the nature of trade secrets or other information, the disclosure of which the trustees in good faith believe is not in the best interest of the statutory trust or could damage the statutory trust or its business; or (2) The statutory trust is required by law or by agreement with a third party to keep confidential. (e) A statutory trust may maintain its records in other than a written form if such form is capable of conversion into a written form within a reasonable time. #### Section 12-306 (a) Except as provided in the governing instrument of a statutory trust: (1) Meetings of beneficial owners may be held at any place or by conference telephone or in any other manner by which all persons participating in the meeting may hear each other; and (2) Participation in a meeting in accordance with item (1) of this subsection shall constitute presence in person at the meeting. (b) Except as provided in the governing instrument of a statutory trust, on any matter that is to be voted on by the beneficial owners: (1) The beneficial owners may take action on the matter without a meeting, without prior notice, and without a vote if a consent or consents in writing, setting forth the action taken, is signed by the beneficial owners having not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all interests in the statutory trust entitled to vote on the matter were present and voted; and (2) A beneficial owner may vote: (i) In person; or (ii) By proxy granted in writing, by means of telephonic or electronic transmission, or as otherwise permitted by applicable law. (c) Except as provided in the governing instrument of a statutory trust, a consent transmitted by electronic transmission by a beneficial owner or by a person authorized to act for a beneficial owner shall be deemed to be written and signed for purposes of this section. (d) Except as provided in this title or the governing instrument of a statutory trust, any act requiring the approval of the beneficial owners shall be approved by the affirmative vote of a majority of all the votes entitled to be cast on the matter. #### Section 12-307 (a) Notwithstanding Sec. 3-709 of this article, the provisions of Title 3, Subtitle 7 of this article apply to a statutory trust formed on or after October 1, 2023, that is a closed-end investment company as defined in the Investment Company Act of 1940. (b) Notwithstanding Sec. 3-709 of this article, the governing instrument of a statutory trust formed before October 1, 2023, that is a closed-end investment company as defined in the Investment Company Act of 1940 may provide that Title 3, Subtitle 7 of this article applies to the statutory trust. ### Subtitle 4. Trustees; Powers; Liabilities #### Section 12-401 (a) Except as provided in its governing instrument, the business and affairs of a statutory trust shall be managed under the direction of its trustees. (b) Except as provided in the governing instrument of a statutory trust, neither the power to give direction to a trustee or other person nor the exercise by any person, including a beneficial owner, of a direction shall cause that person to have duties, including fiduciary duties, or liabilities relating to the statutory trust or to a beneficial owner. #### Section 12-402 (a) Subject to the provisions of subsections (d) and (e) of this section, and except as provided in the governing instrument of a statutory trust, a trustee, when acting in such capacity, is not personally liable to any person other than the statutory trust or a beneficial owner for any act, omission, or obligation of the statutory trust or any trustee. (b) Subject to subsection (c) of this section, a trustee shall perform the trustee's duties as a trustee, including the duties as a member of a committee of the trustees on which the trustee serves: (1) In good faith; (2) In a manner that the trustee reasonably believes to be in the best interests of the statutory trust; and (3) With the care that an ordinarily prudent person in a like position would use under similar circumstances. (c) The governing instrument of a statutory trust may include a provision expanding or limiting the duties of a trustee set forth in subsection (b) of this section, provided that the governing instrument may not eliminate the duty to act in good faith. (d) (1) A trustee who performs the duties of a trustee in accordance with the standard provided under subsection (b) of this section, as may be expanded or limited in the governing instrument in accordance with subsection (c) of this section, has no liability by reason of being or having been a trustee of the statutory trust. (2) A trustee shall have no duties other than as set forth in subsection (b) of this section, as expanded or limited in the governing instrument in accordance with subsection (c) of this section. (3) The governing instrument of a statutory trust may include a provision expanding or limiting the liability of its trustees and officers to the statutory trust or its beneficial owners, provided that the governing instrument may not limit the liability of its trustees and officers to any extent greater than that permitted by Title 2, Subtitle 4 of this article in connection with the limitation of liability of directors and officers of a Maryland corporation. (e) No creditor of a trustee shall have any right to obtain possession of, or otherwise exercise any legal or equitable remedy with respect to, any property of the statutory trust with respect to any claim against, or obligation of, the trustee in the trustee's individual capacity. #### Section 12-403 (a) Except as provided in its governing instrument, a statutory trust shall have the power to: (1) Indemnify and hold harmless, and to obligate itself to indemnify and hold harmless, any trustee, officer, employee, or agent from and against any and all claims and demands whatsoever; and (2) Pay or reimburse in advance of final disposition of a proceeding, as defined in Sec. 2-418 of this article, reasonable expenses incurred in connection with the proceeding. (b) Except as provided in the governing instrument of a statutory trust, a trustee shall be indemnified to the same extent as a director of a corporation under Sec. 2-418 of this article. #### Section 12-404 (a) Except as provided in the governing instrument of a statutory trust: (1) Meetings of trustees may be held at any place or by conference telephone or in any other manner by which all persons participating in the meeting as trustees may hear each other; and (2) Participation in a meeting in accordance with item (1) of this subsection shall constitute presence in person at the meeting. (b) Except as provided in the governing instrument of a statutory trust, on any matter that is to be voted on by the trustees: (1) The trustees may take action on the matter without a meeting, without prior notice, and without a vote if a consent or consents in writing, setting forth the action taken, is signed by the trustees having not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all trustees entitled to vote on the matter were present and voted; and (2) A trustee may vote: (i) In person; or (ii) By proxy granted in writing, by means of telephonic or electronic transmission, or as otherwise permitted by applicable law. (c) Except as provided in the governing instrument of a statutory trust, a consent transmitted by electronic transmission by a trustee or by a person authorized to act for a trustee shall be deemed to be written and signed for purposes of this section. (d) Except as provided in the governing instrument of a statutory trust, any act requiring the approval of the trustees shall be approved by the affirmative vote of a majority of the trustees. #### Section 12-405 (a) This section applies to a statutory trust that is an investment company, as defined by the Investment Company Act of 1940. (b) A trustee of a statutory trust who with respect to the statutory trust is not an interested person, as defined by the Investment Company Act of 1940, shall be deemed to be independent and disinterested when making a determination or taking any action as a trustee. ### Subtitle 5. Legal Proceedings #### Section 12-501 (a) Service of process on a statutory trust may be effected in the same manner as service of process on a Maryland corporation. (b) In the governing instrument of a statutory trust or other writing, a trustee, beneficial owner, or other person may consent to be: (1) Subject to: (i) The nonexclusive jurisdiction of the courts of, or arbitration in, a specified jurisdiction; (ii) The exclusive jurisdiction of the courts of the State; or (iii) The exclusivity of arbitration in a specified jurisdiction or the State; and (2) Served with legal process in the manner prescribed in the governing instrument of the statutory trust or other writing. (c) The property of a statutory trust is subject to attachment and execution as if the statutory trust was a corporation. (d) Notwithstanding the provisions of this section, if the governing instrument of a statutory trust, including the governing instrument of a statutory trust which is a registered investment company under the Investment Company Act of 1940, creates one or more series or classes as provided in Sec. 12-207(b) of this title, and if separate and distinct records are maintained for any such series or class and the assets associated with any such series or class are held and accounted for separately from the other assets of the statutory trust, or any other series or class, and if the governing instrument so provides, and notice of the limitation on liabilities of a series or class as referenced in this subsection is set forth in the certificate of trust of the statutory trust, then: (1) The debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to a particular series or class shall be enforceable against the assets of that series or class only, and not against the assets of the statutory trust generally or any other series or class; and (2) Unless otherwise provided in the governing instrument, none of the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to the statutory trust generally or any other series or class shall be enforceable against the assets of that series or class. ### Subtitle 6. Merger or Consolidation #### Section 12-601 Except as provided in its governing instrument, a statutory trust may merge or consolidate with or into one or more statutory trusts, other business entities, or foreign business entities. #### Section 12-602 (a) Except as provided in the governing instrument of a statutory trust, a merger or consolidation shall be approved by each statutory trust which is to merge or consolidate by a majority of the trustees and by the beneficial owners by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter. (b) Except as provided in its governing instrument, a merger in which a statutory trust is the successor requires only the approval of a majority of the trustees if: (1) The merger does not reclassify or change its outstanding beneficial interests or otherwise amend its governing instrument in any manner requiring a vote of the beneficial owners; and (2) The number of beneficial interests to be issued or delivered in the merger is not more than 20 percent of the number of its beneficial interests of the same class or series outstanding immediately before the merger becomes effective. (c) The merger or consolidation shall be approved by any other business entity or foreign business entity party to the merger or consolidation in the manner required by the charter, declaration of trust, partnership agreement, or other organization document of the entity and the laws of the jurisdiction where the entity is organized. #### Section 12-603 (a) In or in connection with a merger or consolidation, beneficial interests or other rights or securities of, or interests in, a statutory trust, other business entity, or foreign business entity which is a party to the merger or consolidation may be exchanged for or converted into cash, property, rights, or securities of, or interests in, the successor or any other business entity or foreign business entity, whether or not a party to the transaction. (b) Notwithstanding approval by the trustees or beneficial owners, an agreement of merger or consolidation may be terminated or amended at any time prior to the effective time of the merger or consolidation: (1) By agreement of the parties to the merger or consolidation; or (2) Under a provision for the termination or amendment of the merger or consolidation contained in the agreement of merger or consolidation. #### Section 12-604 Articles of merger or consolidation shall be filed for record with the Department. #### Section 12-605 Articles of merger or consolidation shall state: (1) The name and jurisdiction of formation or organization of each statutory trust or other business entity which is to merge or consolidate and as to each foreign business entity, the date of its formation, and whether it is registered or qualified to do business in the State; (2) The name of the successor; (3) Each county in the State where each entity party to the articles of merger or consolidation has its principal office and any of the parties other than the successor owns an interest in land; (4) If the successor is a foreign business entity, the location of its principal office in the jurisdiction in which it is organized and the name and address of its resident agent in the State; (5) That the merger or consolidation has been approved by each statutory trust, other business entity, or foreign business entity that is to merge or consolidate in the manner required by its governing instrument or certificate of trust and by the laws of the place where it is organized; (6) Any amendment to the certificate of trust of the successor to be effected as part of the merger or consolidation; (7) (i) The manner and basis of converting or exchanging issued beneficial interests or other ownership interests of each merging or consolidating statutory trust, other business entity, or foreign business entity into: (1) Different beneficial interests or other ownership interests of a statutory trust, another business entity, or foreign business entity; or (2) Any other consideration; and (ii) The treatment of any beneficial interests or other ownership interests of each merging or consolidating statutory trust, other business entity, or foreign business entity not being converted or exchanged; and (8) The future effective time, which shall be a time certain, of the merger or consolidation if it is not to be effective on the acceptance for record by the Department of the articles of merger or consolidation. #### Section 12-606 Unless a future effective time is provided in articles of merger or consolidation, in which event a merger or consolidation shall be effective at the future effective time, a merger or consolidation shall be effective on the acceptance for record by the Department of articles of merger or consolidation. #### Section 12-607 (a) Notwithstanding anything to the contrary contained in its governing instrument, the governing instrument of a statutory trust containing a specific reference to this section may provide that an agreement of merger or consolidation approved in accordance with this subtitle may: (1) Effect any amendment to the governing instrument of the statutory trust; or (2) Effect the adoption of a new governing instrument of the statutory trust if it is the successor trust in the merger or consolidation. (b) Any amendment to the governing instrument of a statutory trust or adoption of a new governing instrument of a statutory trust made under this section shall be effective at the effective time of the merger or consolidation. (c) The provisions of this section may not be construed to limit the accomplishment of a merger or consolidation or of any of the matters referred to in this section by any other means provided for in the governing instrument of a statutory trust or other agreement or as otherwise permitted by law, including that the governing instrument of any constituent statutory trust to the merger or consolidation shall be the governing instrument of the successor trust. #### Section 12-608 (a) The Department shall prepare certificates of merger or consolidation that specify: (1) The name of each party to the articles of merger or consolidation; (2) The name of the successor and the location of its principal office in the State or, if it has none, its principal place of business; and (3) The time the articles of merger or consolidation are accepted for record by the Department. (b) In addition to any other provision of law with respect to recording, the Department shall send one certificate each to the clerk of the circuit court for each county where the articles show that a merging or consolidating statutory trust, corporation, partnership, limited partnership, or limited liability company other than the successor owns an interest in land. (c) On receipt of a certificate, a clerk promptly shall record it with the land records. #### Section 12-609 (a) In order to keep the land assessment records current in each county, the Department shall require a statutory trust, corporation, partnership, limited partnership, or limited liability company to submit with the articles of merger or consolidation a property certificate for each county where a merging or consolidating statutory trust, corporation, partnership, limited partnership, or limited liability company other than the successor owns an interest in land. (b) A property certificate is not required with respect to any property in which the only interest owned by the merging or consolidating statutory trust, corporation, partnership, limited partnership, or limited liability company is a security interest. (c) The property certificate shall be in the form and number of copies which the Department requires and may include the certificate of the Department required by subsection (a) of this section. (d) (1) The property certificate shall provide a deed reference or other description sufficient to identify the property. (2) The Department shall indicate on the certificate the time the articles of merger or consolidation are accepted for record and send a copy of it to the chief assessor of the county where the property is located. (e) A transfer, vesting, or devolution of title to the property is not invalidated or otherwise affected by any error or defect in the property certificate, failure to file it, or failure by the Department to act on it. #### Section 12-610 (a) Consummation of a merger or consolidation has the effects provided in this section. (b) The separate existence of each statutory trust, other business entity or foreign business entity party to the articles of merger or consolidation, except the successor, ceases. (c) The beneficial interests of each statutory trust party to the articles of merger or consolidation which are to be converted or exchanged under the terms of the articles of merger or consolidation cease to exist, subject to the rights of an objecting beneficial owner under the governing instrument or agreement of merger or consolidation. (d) In addition to any other purposes and powers set forth in the articles of merger or consolidation, if the articles of merger or consolidation provide, the successor has the purposes and powers of each party to the articles of merger or consolidation. (e) (1) The assets of each party to the articles of merger or consolidation, including any legacies which it would have been capable of taking, transfer to, vest in, and devolve on the successor without further act or deed. (2) Confirmatory deeds, assignments, or similar instruments to evidence the transfer may be executed and delivered at any time in the name of the transferring party to the articles of merger or consolidation by its last acting officers or trustees or by the appropriate officers or trustees of the successor. (f) (1) (i) The successor is liable for all the debts and obligations of each nonsurviving party to the articles of merger or consolidation. (ii) An existing claim, action, or proceeding pending by or against any nonsurviving party to the articles of merger or consolidation may be prosecuted to judgment as if the merger or consolidation had not taken place, or, on motion of the successor or any party, the successor may be substituted as a party and the judgment against the nonsurviving party to the articles of merger or consolidation constitutes a lien on the property of the successor. (2) A merger or consolidation does not impair the rights of creditors or any liens on the property of any statutory trust, other business entity, or foreign business entity party to the articles of merger or consolidation. #### Section 12-611 (a) In the event that a statutory trust does not have perpetual existence, a statutory trust shall be dissolved and its affairs wound up as provided in its governing instrument. (b) On dissolution of a statutory trust and until the filing of a certificate of cancellation as provided in Sec. 12-204(d) of this title, the trustees or other persons who are responsible for winding up the affairs of the statutory trust: (1) Shall collect and distribute the assets of the statutory trust, applying them to the payment, satisfaction, and discharge of existing debts and obligations of the statutory trust, including reasonable expenses of liquidation, and distribute the remaining assets among the beneficial owners; and (2) May carry out the contracts of the statutory trust, sell all or any part of the assets of the statutory trust at public or private sale, sue or be sued in the name of the statutory trust, and do all other acts consistent with law and the governing instrument of the statutory trust necessary or proper to liquidate the statutory trust and wind up its affairs. (c) Any person, including any trustee, who is responsible for winding up the affairs of a statutory trust and who has complied with subsection (b) of this section is not personally liable to any claimant of the dissolved statutory trust by reason of the person's actions in winding up the statutory trust. (d) (1) Except as provided in the governing instrument of a statutory trust: (i) A series or class established in accordance with Sec. 12-207(b) of this title may be dissolved and its affairs wound up without causing the dissolution of the statutory trust or any other series or class of the statutory trust; (ii) The dissolution, winding up, liquidation, or termination of the statutory trust or any series or class of the statutory trust shall not affect the limitation of liability provided by Sec. 12-501(d) of this title with respect to a series or class established in accordance with Sec. 12-207(b) of this title; and (iii) The death, incapacity, dissolution, termination, or bankruptcy of a beneficial owner of a series or class described in item (ii) of this paragraph shall not result in the termination or dissolution of the series or class, and the series or class may not be terminated or revoked by a beneficial owner of the series or class or other person except in accordance with the terms of the governing instrument. (2) A series or class established in accordance with Sec. 12-207(b) of this title shall be dissolved and its affairs wound up as provided in the governing instrument. (3) On dissolution of a series or class of a statutory trust, the persons who are responsible for winding up the affairs of the series or class, in the name of the statutory trust and for and on behalf of the statutory trust and the series or class: (i) Shall provide for the claims and obligations of the series or class and distribute the assets of the series or class as provided under subsection (b)(1) of this section; and (ii) May take all actions with respect to the series or class set forth in subsection (b)(2) of this section. (4) Any person, including any trustee, who is responsible for winding up the affairs of a series or class who has complied with paragraph (3) of this subsection may not be personally liable to the claimants of the dissolved series or class by reason of the person's actions in winding up the series or class. ### Subtitle 7. Fees #### Section 12-701 Fees for documents filed or requested under this title shall be as provided for in Sec. 1-203 of this article. ### Subtitle 8. Forfeiture #### Section 12-801 (a) (1) Except with respect to a tax collectible locally, the State Comptroller shall certify to the Department, as soon as practicable after October 1 of each year, a list of every Maryland statutory trust that has not paid a tax that was due before October 1 of the year. (2) When the Comptroller certifies the list to the Department, the Comptroller shall mail to each listed statutory trust, at the statutory trust's address as it appears on the Comptroller's records, a notice that the statutory trust's right to do business in the State and the right to the use of its name will be forfeited unless the statutory trust pays all taxes, interest, and penalties due. (3) The failure of a statutory trust to receive the notice mailed in accordance with paragraph (2) of this subsection does not affect the forfeiture of the statutory trust's right to do business in the State or to use its name. (b) (1) As soon as practicable after October 1 of each year, the Secretary of Labor shall certify to the Department a list of every Maryland statutory trust that has not paid an unemployment insurance contribution or made a reimbursement payment that was due before October 1 of the year. (2) When the Secretary certifies the list to the Department, the Secretary shall mail to each listed statutory trust, at the statutory trust's address as it appears on the Secretary's records, a notice that the statutory trust's right to do business in the State and the right to the use of its name will be forfeited unless the statutory trust pays all contributions, reimbursement payments, interest, and penalties due. (3) The failure of a statutory trust to receive the notice mailed in accordance with paragraph (2) of this subsection does not affect the forfeiture of the statutory trust's right to do business in the State or to use its name. (c) As soon as practicable after October 1 of each year, the Department shall certify a list of every Maryland statutory trust that has not filed an annual report with the Department for the prior year as required by law or has not paid a tax that was due before October 1 of the year. (d) After the lists are certified, the Department shall issue a proclamation declaring, for each statutory trust included on a list, that, subject to Sec. 12-810 of this subtitle, the right to do business in the State and to use the name of the statutory trust is forfeited as of the date of the proclamation, without proceedings of any kind at law or at equity. #### Section 12-802 (a) (1) Within 10 days after the issuance of a proclamation under Sec. 12-801(d) of this subtitle, the Department shall mail notice of the proclamation to each statutory trust named in the proclamation. (2) The notice shall be addressed to the statutory trust at the statutory trust's mailing address on file with the Department or, if none, at any other address for the statutory trust appearing on the records of the Department. (b) A statutory trust that pays all taxes, unemployment insurance contributions, reimbursement payments, interest, and penalties due within 60 days after the issuance of the proclamation shall have its right to do business in the State and to use its name reinstated in accordance with Sec. 12-805 of this subtitle retroactive to the date of forfeiture. #### Section 12-803 (a) If the Department is satisfied that a statutory trust named in a proclamation issued under Sec. 12-801(d) of this subtitle has not failed to pay the taxes, unemployment insurance contributions, or reimbursement payments, or to file the report within the period specified in Sec. 12-801 of this subtitle, or that the statutory trust has been mistakenly reported to the Department by the State Comptroller or the Secretary of Labor, the Department may file in its records a proclamation correcting the mistake. (b) The effect of a proclamation correcting a mistake under subsection (a) of this section is to restore the right of the statutory trust to do business in the State and to use the name of the statutory trust as if the right had at all times remained in full force and effect. #### Section 12-804 This subtitle does not repeal, supersede, or in any manner affect any remedy or provision of law: (1) For the collection of taxes, unemployment insurance contributions, or reimbursement payments and any interest and penalties due; or (2) To compel the filing of annual reports. #### Section 12-805 If the authority of a statutory trust to do business in the State and to use its name has been forfeited for nonpayment of taxes, unemployment insurance contributions, or reimbursement payments, or for failure to file an annual report, the statutory trust may apply for reinstatement by filing a certificate of reinstatement with the Department in accordance with Sec. 12-806 of this subtitle. #### Section 12-806 A certificate of reinstatement shall include: (1) The name of the statutory trust at the time its right to do business in the State was forfeited; (2) The name that the statutory trust will use after reinstatement, which shall comply with the provisions of this article with respect to statutory trust names; (3) The address of the principal office of the statutory trust in the State if different from its principal office in the State at the time the right to do business in the State was forfeited; and (4) The name and address of the resident agent of the statutory trust. #### Section 12-807 The Department may not accept a certificate of reinstatement for record unless: (1) All annual reports required to be filed by the statutory trust, or which would have been required if the right to do business in the State had not been forfeited, are filed; and (2) Unemployment insurance contributions or reimbursement payments, all State and local taxes, except taxes on real estate, and all interest and penalties due by the statutory trust, or which would have become due if the right to do business had not been forfeited, are paid, whether or not barred by limitations. #### Section 12-808 Except in a proceeding by the State or any of its political subdivisions, the acceptance of a certificate of reinstatement for record by the Department is conclusive evidence of: (1) The payment of all fees, taxes, unemployment insurance contributions, and reimbursement payments required to be paid; (2) The filing of all reports required to be filed; and (3) The reinstatement of the right of the statutory trust to do business in the State. #### Section 12-809 (a) Any person that transacts business in the name of, or for the account of, a statutory trust knowing that the statutory trust's right to do business in the State has been forfeited and has not been reinstated at the time the business was transacted is guilty of a misdemeanor and on conviction is subject to a fine of not more than $500. (b) A prosecution for a violation of subsection (a) of this section, concerning acts alleged to have occurred while the right of a statutory trust to do business in the State was forfeited, may not be instituted after the date that a certificate of reinstatement of the statutory trust is filed. #### Section 12-810 The forfeiture of the right to do business in the State and the right to the use of the name of the statutory trust under this title does not: (1) Impair the validity of a contract entered into by the statutory trust or any act of the statutory trust before or after the forfeiture; or (2) Prevent the statutory trust from defending any action, suit, or proceeding in a court of the State. ### Subtitle 9. Foreign Statutory Trusts #### Section 12-901 (a) Subject to the Maryland Constitution: (1) The laws of the jurisdiction under which a foreign statutory trust is formed govern its organization, internal affairs, and the liability of its trustees; and (2) A foreign statutory trust may not be denied registration by reason of any difference between the laws under which the foreign statutory trust is formed and the laws of this State. (b) A foreign statutory trust may not do any kind of intrastate, interstate, or foreign business in this State which the laws of this State prohibit a domestic statutory trust from doing. #### Section 12-902 (a) Before doing any interstate, intrastate, or foreign business in this State, a foreign statutory trust shall register with the Department. (b) To register, a foreign statutory trust shall submit to the Department an application for registration as a foreign statutory trust executed by an authorized person and setting forth: (1) The name of the foreign statutory trust and, if different, the name under which it proposes to register and do business in this State; (2) The jurisdiction under the laws of which it was formed and the date of its formation; (3) The general character of the business it proposes to transact in this State; (4) The name and address of its resident agent in this State; (5) A statement that the Department is appointed as the resident agent of the foreign statutory trust if no resident agent has been designated under item (4) of this subsection or, if a resident agent has been designated, the resident agent's authority has been revoked or the resident agent cannot be found or served with the exercise of reasonable diligence; and (6) The address of the office required to be maintained in the jurisdiction of its formation by the laws of that jurisdiction or, if not so required, of the principal office of the foreign statutory trust. #### Section 12-903 A foreign statutory trust may register with the Department under any name, whether or not it is the name under which it is registered in its jurisdiction of formation, as provided under Title 1, Subtitle 5 of this article. #### Section 12-904 If any statement in the application for registration of a foreign statutory trust is false when made or any arrangements or other facts described have changed making the application inaccurate in any respect, a foreign statutory trust shall promptly file with the Department a certificate, executed by an authorized person, correcting the statement. #### Section 12-905 (a) A foreign statutory trust may cancel its registration by filing with the Department a certificate of cancellation executed by an authorized person. (b) The filing of a certificate of cancellation does not terminate the authority of the Department to accept service of process on the foreign statutory trust with respect to causes of action arising out of doing business in this State. #### Section 12-906 (a) If a foreign statutory trust is doing or has done any intrastate, interstate, or foreign business in this State without complying with the requirements of this subtitle, the foreign statutory trust and any person claiming under it may not maintain suit in any court in this State, unless the statutory trust shows to the satisfaction of the court that: (1) The foreign statutory trust or the person claiming under it has paid the penalty specified in subsection (d)(1) of this section; and (2) (i) The foreign statutory trust or a foreign statutory trust successor to it has complied with the requirements of this title; or (ii) The foreign statutory trust and any foreign statutory trust successor to it are no longer doing intrastate, interstate, or foreign business in this State. (b) The failure of a foreign statutory trust to register in this State does not: (1) Impair the validity of a contract or act of the foreign statutory trust; or (2) Prevent the foreign statutory trust from defending any action, suit, or proceeding in a court of this State. (c) A foreign statutory trust, by doing business in this State without registration, appoints the Department as its agent for service of process with respect to causes of action arising out of doing business in this State. (d) (1) (i) If a foreign statutory trust does any intrastate, interstate, or foreign business in this State without registering, the Department shall impose a penalty of $200 on the foreign statutory trust. (ii) The penalty under this subsection shall be collected and may be reduced or abated under Sec. 14-704 of the Tax - Property Article. (2) A trustee or an agent who transacts intrastate, interstate, or foreign business in this State on behalf of a foreign business trust that has not registered with the Department is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $1,000. #### Section 12-907 The Attorney General may bring an action to restrain a foreign statutory trust from doing business in this State in violation of this subtitle. #### Section 12-908 (a) In addition to any other activities which may not constitute doing business in this State, for the purposes of this subtitle, the following activities of a foreign statutory trust do not constitute doing business in this State: (1) Maintaining, defending, or settling an action, a suit, a claim, a dispute, or an administrative or arbitration proceeding; (2) Holding meetings of its trustees or agents or carrying on other activities that relate to its internal affairs; (3) Maintaining bank accounts; (4) Conducting an isolated transaction not in the course of a number of similar transactions; (5) Foreclosing mortgages and deeds of trust on property in this State; (6) As a result of default under a mortgage or deed of trust, acquiring title to property in this State by foreclosure, deed in lieu of foreclosure, or otherwise; (7) Holding, protecting, renting, maintaining, and operating property in this State acquired as described in item (6) of this subsection; or (8) Selling or transferring title to property in this State acquired as described in item (6) of this subsection to any person, including the Federal Housing Administration or the Veterans Administration. (b) In addition to any other activities which may constitute doing business in this State, for the purposes of this subtitle, a foreign statutory trust that owns income producing real or tangible personal property in this State, other than property exempted by subsection (a) of this section, shall be considered to be doing business in this State. #### Section 12-909 By doing intrastate, interstate, or foreign business in this State, a foreign statutory trust assents to the laws of this State. #### Section 12-910 With respect to a cause of action as to which a foreign statutory trust would not otherwise be subject to suit in this State, compliance with this subtitle: (1) Does not of itself render a foreign statutory trust subject to suit in this State; and (2) Is not considered as consent by it to be sued in this State. #### Section 12-911 (a) If a foreign statutory trust that owns property rights, privileges, franchises, or other assets located in this State is a party to a merger in which a foreign business entity is the successor, the transfer to, vesting in, or devolution on the successor of the property rights, privileges, franchises, or other assets of the nonsurviving foreign statutory trust is effective as provided by the laws of the jurisdiction that governs the merger. (b) The successor described in subsection (a) of this section shall file with the Department a certificate executed by an authorized person that specifies: (1) Each county in this State where a foreign statutory trust party to the merger, except the successor, owned an interest in land; (2) The name of each party to the merger; (3) The jurisdiction under the laws of which each party was formed; and (4) The name of the successor. (c) If a copy of the document effecting the merger has not been filed with the Department as provided in Sec. 12-205 of this title, the successor shall file with the Department an officially certified copy of that document. (d) (1) Except as provided in paragraph (2) of this subsection, when the Department receives the articles and any certificate of the successor, the Department shall prepare and file certificates of merger in the manner provided for a statutory trust. (2) The certificate of merger: (i) Need not state the principal office in the State of a foreign statutory trust that does not have a principal office; and (ii) Shall include other information specified in the certificate filed by the successor. #### Section 12-912 (a) The Department may forfeit the right of a foreign statutory trust to do business in the State if the foreign statutory trust fails to file with the Department any report or fails to pay any late filing penalty required by law: (1) Within the time required by law; and (2) Thereafter, within 30 days after the Department makes a written demand for the delinquent report or late filing penalty. (b) Unless the Department excuses a reasonable delay for good cause shown, the forfeiture is effective 15 days after written notice of forfeiture from the Department without legal proceedings of any kind. (c) The demand for a delinquent report or late filing penalty and the notice of forfeiture shall be addressed to the foreign statutory trust: (1) At the address of the foreign statutory trust on file with the Department; or (2) If the foreign statutory trust has no address on file with the Department, in care of the Secretary of State or corresponding official of the jurisdiction in which the foreign statutory trust was formed or is existing, if known to the Department. (d) On forfeiture of the right of a foreign statutory trust to do business in the State, the foreign statutory trust is subject to the same rules, legal provisions, and sanctions as if it had never registered to do business in the State. ### Subtitle 10. Conversions of Statutory Trusts #### Section 12-1001 (a) In this subtitle, "other entity" means: (1) A Maryland corporation incorporated under Title 2 of this article; (2) A foreign corporation, as defined in Sec. 1-101 of this article; (3) A domestic limited liability company, as defined in Sec. 4A-101 of this article; (4) A foreign limited liability company, as defined in Sec. 4A-101 of this article; (5) A partnership, as defined in Sec. 9A-101(i) of this article; (6) A limited partnership, as defined in Sec. 10-101 of this article, including a limited partnership registered as a limited liability limited partnership under Sec. 10-805 of this article; (7) A foreign limited partnership as defined in Sec. 10-101 of this article; (8) A business trust, as defined in Sec. 1-101 of this article, excluding a statutory trust; or (9) Another form of unincorporated business formed under the laws of this State or the laws of the United States, another state of the United States, a territory, possession, or district of the United States, or a foreign country. (b) Except as provided in its governing instrument, a statutory trust may convert to an other entity by: (1) Approving the conversion in accordance with Sec. 12-1002 of this subtitle; and (2) Filing for record with the Department articles of conversion executed in the manner required by Title 1 of this article. (c) An other entity may convert to a statutory trust by complying with Sec. 12-1002 of this subtitle and filing for record with the Department: (1) Articles of conversion executed in the manner required by Title 1 of this article; and (2) A certificate of trust, which shall include the name of the converting other entity, executed in the manner required by Sec. 12-204 of this title and otherwise complying with this title. #### Section 12-1002 (a) Except as provided in the governing instrument, a conversion of a statutory trust to an other entity shall be approved by a majority of the trustees and by the beneficial owners by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter. (b) A conversion of an other entity to a statutory trust shall be approved in the manner and by the vote required by its governing document and the laws of the place where it is incorporated or organized. #### Section 12-1003 (a) In this section, "facts ascertainable outside the articles of conversion" includes: (1) An action or determination by any person, including: (i) The statutory trust or other entity, as applicable; (ii) The trustees, directors, partners, members, officers, or other agents of the statutory trust or other entity; and (iii) Any other person affiliated with the statutory trust or other entity; and (2) Any other event. (b) Articles of conversion shall be filed for record with the Department. (c) In a conversion of a statutory trust to an other entity, the articles of conversion shall set forth: (1) The name of the statutory trust and the date of filing of its original certificate of trust with the Department; (2) The name of the other entity to which the statutory trust will be converted and the place of incorporation or organization of the other entity; (3) A statement that the conversion has been approved in accordance with the provisions of this subtitle; (4) The manner and basis of converting or exchanging issued beneficial interests of the statutory trust into shares of stock, membership interests, partnership interests, beneficial interests, or other ownership interests of the other entity, or other consideration, and the treatment of any issued beneficial interests not to be converted or exchanged, any of which may be made dependent on facts ascertainable outside of the articles of conversion; (5) If the other entity is not organized under the laws of this State: (i) The location of the principal office in the place where it is organized; and (ii) The name and address of the resident agent in this State; and (6) Any other provision necessary to effect the conversion. (d) In a conversion of an other entity to a statutory trust, the articles of conversion shall set forth: (1) The name of the other entity, the date on which the other entity was first created, and the place of incorporation or organization of the other entity; (2) The name of the statutory trust to which the other entity will be converted; (3) A statement that the conversion has been approved in accordance with the provisions of this subtitle; (4) The manner and basis of converting or exchanging any outstanding shares of stock, membership interests, partnership interests, beneficial interests, or other ownership interests of the other entity into beneficial interests of the statutory trust, or other consideration, and the treatment of any outstanding shares of stock, membership interests, partnership interests, beneficial interests, or other ownership interests not to be converted or exchanged, any of which may be made dependent on facts ascertainable outside of the articles of conversion; and (5) Any other provision necessary to effect the conversion. (e) The articles of conversion may contain a future effective time of the articles of conversion that is not later than 30 days after the articles of conversion are accepted for record. #### Section 12-1004 (a) A conversion has the effects provided in this section. (b) (1) This subsection applies on the completion of the conversion of a statutory trust to an other entity. (2) The statutory trust shall cease to exist as a statutory trust and shall continue to exist as the other entity into which the statutory trust has converted, and the other entity, for all purposes of the laws of this State, shall be deemed to be the same entity as the converting statutory trust. (3) (i) All the assets of the statutory trust, including any legacies that it would have been capable of taking, shall vest in and devolve on the other entity without further act or deed and shall be the property of the other entity, and the title to any real property vested by deed or otherwise in the statutory trust shall not revert or be in any way impaired by reason of a conversion under this subtitle. (ii) The conversion of the statutory trust to an other entity does not affect, invalidate, terminate, suspend, or nullify any licenses, permits, or registrations granted to the statutory trust before the conversion. (iii) Confirmatory deeds, assignments, or similar instruments to evidence the conversion may be executed and delivered at any time in the name of the statutory trust by its last acting trustees or officers, or by the appropriate authorized persons, partners, officers, trustees, or members of the other entity. (4) (i) The other entity shall be liable for all the debts and obligations of the statutory trust. (ii) An existing claim, action, or proceeding pending by or against the statutory trust may be prosecuted to judgment as if the conversion had not taken place, or, on motion of the other entity or any party, the other entity may be substituted as a party and a judgment against the statutory trust constitutes a lien on the property of the other entity. (iii) A conversion does not impair the rights of creditors or any liens on the property of the statutory trust. (5) Subject to the treatment of the ownership interests of the beneficial owners of the statutory trust under the articles of conversion, the ownership interests of the beneficial owners of the statutory trust shall cease to exist as beneficial interests of the statutory trust and continue to exist as ownership interests in the other entity. (6) The conversion of the statutory trust to an other entity in accordance with articles of conversion under this subtitle does not affect any debts, obligations, or liabilities of the statutory trust or the personal liability of any person incurred before the conversion. (7) Unless otherwise provided in the articles of conversion, the converting statutory trust is not required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion does not constitute dissolution or a transfer of assets or liabilities of the statutory trust. (8) A person becomes liable for any obligation incurred by the statutory trust before the completion of the conversion only to the extent provided for by the laws applicable to the other entity. (c) (1) This subsection applies on the completion of the conversion of an other entity to a statutory trust. (2) The statutory trust, for all purposes of the laws of this State, shall be deemed to be the same entity as the converting other entity. (3) (i) All the assets of the other entity, including any legacies that it would have been capable of taking, vest in and devolve on the statutory trust without further act or deed and shall be the property of the statutory trust, and the title to any real property vested by deed or otherwise in the other entity shall not revert or be in any way impaired by reason of a conversion under this subtitle. (ii) The conversion of the other entity to a statutory trust does not affect, invalidate, terminate, suspend, or nullify any licenses, permits, or registrations granted to the other entity before the conversion. (iii) Confirmatory deeds, assignments, or similar instruments to evidence the conversion may be executed and delivered at any time in the name of the other entity by the appropriate authorized persons, partners, officers, trustees, or members of the other entity, or by the trustees or officers of the statutory trust. (4) (i) The statutory trust shall be liable for all the debts and obligations of the other entity. (ii) An existing claim, action, or proceeding pending by or against the other entity may be prosecuted to judgment as if the conversion had not taken place, or, on motion of the other entity or any party, the statutory trust may be substituted as a party and a judgment against the other entity constitutes a lien on the property of the statutory trust. (iii) A conversion does not impair the rights of creditors or any liens of the property of the other entity. (5) The conversion of an other entity to a statutory trust in accordance with articles of conversion under this subtitle does not affect any debts, obligations, or liabilities of the other entity or the personal liability of any person incurred before the completion of the conversion. (6) A person remains liable for any obligation incurred by the other entity before the completion of the conversion only to the extent that the person would have been liable if the conversion had not occurred. (7) Subject to the treatment of the ownership interests of the owners of the other entity under the articles of conversion, the ownership interests of the owners of the other entity cease to exist as ownership interests in the converted other entity and continue to exist as beneficial interests in the statutory trust. #### Section 12-1005 (a) In a conversion of an other entity to a statutory trust, the stock, membership interests, partnership interests, beneficial interests, or other ownership interests of the other entity may be exchanged for or converted into any one or more of the following: (1) Beneficial interests of the statutory trust or stock, evidence of indebtedness, membership interests, partnership interests, beneficial interests, or other ownership interests of any other statutory trust or other entity, whether or not party to the conversion; (2) Other tangible or intangible property; (3) Money; and (4) Any other consideration. (b) In a conversion of a statutory trust to an other entity, beneficial interests of the statutory trust may be exchanged for or converted into any one or more of the following: (1) Stock, evidence of indebtedness, membership interests, partnership interests, beneficial interests, or other ownership interests of the other entity to which the statutory trust is converted or of any other statutory trust or other entity, whether or not party to the conversion; (2) Other tangible or intangible property; (3) Money; and (4) Any other consideration. #### Section 12-1006 (a) The conversion of an other entity to a statutory trust shall be completed on the later of: (1) The formation of the statutory trust in accordance with this title; or (2) The effectiveness of articles of conversion filed for record with the Department. (b) The conversion of a statutory trust to an other entity shall be completed on the effectiveness of articles of conversion filed for record with the Department. (c) Articles of conversion are effective on the later of: (1) The time the Department accepts the articles of conversion for record; or (2) The future effective time of the articles of conversion as set forth in articles of conversion that have been accepted by the Department for record. (d) (1) (i) Except as provided in subparagraph (ii) of this paragraph, at the time the conversion of an other entity to a statutory trust is completed: (1) The other entity shall be converted to a statutory trust; (2) The conversion shall have the effects set forth in Sec. 12-1004 of this subtitle; and (3) The statutory trust shall be subject to all of the provisions of the Maryland Statutory Trust Act. (ii) Notwithstanding Sec. 12-204 of this title, the existence of the statutory trust shall be deemed to have commenced on the date the other entity commenced existence in the place in which the other entity was first incorporated, created, formed, or otherwise came into being. (2) At the time the conversion of a statutory trust to an other entity is completed, the conversion shall have the effects set forth in Sec. 12-1004 of this subtitle. #### Section 12-1007 (a) Except as provided in the governing instrument, unless the articles of conversion provide otherwise, the proposed conversion of a statutory trust to an other entity may be abandoned before the effective date of the articles of conversion by majority vote of the trustees of the statutory trust. (b) Unless the articles of conversion provide otherwise, the proposed conversion of an other entity to a statutory trust may be abandoned in the manner and by the vote required by the governing document of the other entity and the laws of the place in which it is incorporated or organized or, if no manner and vote is specified, in the manner and by the vote required to approve the conversion under Sec. 12-1002 of this subtitle. (c) If the articles of conversion have been filed with the Department, notice of the abandonment shall be given promptly to the Department. (d) (1) If the proposed conversion is abandoned as provided in this section, no legal liability arises under the articles of conversion. (2) Abandonment of a conversion under this section does not prejudice the rights of any person under any other contract made by a statutory trust party to the proposed conversion in connection with the proposed conversion. --- Md. Code Ann., Corps. & Ass'ns (as displayed at mgaleg.maryland.gov, October 16, 2026)