2023 Maryland Statutes › Corporations and Associations › Title 5 - Special Types of Corporations › Subtitle 1 - Professional Service Corporations › Section 5-114 - Acquisition of Stock Upon Death or Disqualification of Stockholder; Proceedings

(a)    For purposes of this section the term “disqualified stockholder” shall include the personal representative of the estate of a deceased stockholder or a transferee as described in § 5-113 of this subtitle.
(b)    (1)    If an acquisition of stock is required under § 5-113 of this subtitle, the professional corporation shall send, by certified mail, postage prepaid, return receipt requested, a written notice to the disqualified stockholder, offering to purchase the stock at a price which the corporation represents to be the fair value of the stock as of the date of death, disqualification, or transfer.
(2)    The offer notice under paragraph (1) of this subsection must be accompanied by:
(i)    The corporation’s balance sheet for the fiscal year ending not more than 16 months before the effective date of the offer notice;
(ii)    An income statement for that year;
(iii)    A statement of changes in stockholders’ equity for that year; and
(iv)    The latest available interim financial statements, if any.
(c)    The disqualified stockholder may send, by certified mail, postage prepaid, return receipt requested, a written notice to the corporation demanding that the corporation commence a proceeding to determine the fair value of the stock if:
(1)    The disqualified stockholder does not receive a written offer notice under subsection (b) of this section within 60 days after the date of disqualification, transfer, or appointment of the personal representative; or
(2)    The disqualified stockholder rejects the corporation’s offer within 30 days of receipt of the offer by the disqualified stockholder.
(d)    If the corporation fails to commence a proceeding under subsection (c) of this section to determine the fair value of stock within 60 days of written notice of demand by a disqualified stockholder, the disqualified stockholder may commence a proceeding against the corporation to determine the fair value of the stock.
(e)    (1)    If the disqualified stockholder accepts the corporation’s offer under subsection (b) of this section, the corporation shall make payment when the stockholder surrenders the stockholder’s stock.
(2)    Unless a later time is agreed on, payment by the corporation and surrender of the stock by the stockholder shall occur within 60 days from the effective date of the offer notice.
(3)    If the disqualified stockholder fails to respond to the corporation’s offer under subsection (b) of this section within 30 days after delivery of the notice, the stockholder shall be deemed to have accepted the offer.
(4)    Paragraph (3) of this subsection does not apply to the personal representative of a deceased stockholder if the offer under subsection (b) of this section was made before the appointment of the personal representative; provided, however, that an offer under this paragraph shall be deemed accepted if the personal representative does not respond to the offer within 30 days after the personal representative is appointed.
(f)    The corporation shall cancel on the books of the corporation the stock of a disqualified stockholder and the disqualified stockholder shall have no further interest as a stockholder in the corporation other than the right of payment of the fair value of the stock under § 5-113 of this subtitle if the corporation has not delivered an offer notice under subsection (b) of this section and the disqualified stockholder has not demanded that the corporation commence a proceeding to determine the fair value of the stock within 120 days of:
(1)    Appointment of a personal representative of a deceased stockholder; or
(2)    The date an acquisition of stock becomes required under § 5-113(c) of this subtitle.