# Corporations and Associations (GCA)

## Title 12. Statutory Trusts

### 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.

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Md. Code Ann., Corps. & Ass'ns (as displayed at mgaleg.maryland.gov, October 16, 2026)