Morrison & Foerster partner Tracy Bacigalupo explained Maryland’s recently passed Senate Bill 136, which amends the state’s General Corporation Law, in the LegalTechNews article “Maryland Authorizes Corporations' Records, Communications Through Blockchain.” The amendments, which provide explicit statutory authority for Maryland companies to use “electronic networks or databases,” including distributed ledgers or blockchain technology, were passed on April 30 and are set to go into effect October 1.
Ms. Bacigalupo, who is a Maryland-licensed lawyer and a member of the Maryland State Bar Association Committee on Corporation Law, played a significant role in drafting the legislation and getting it passed. As a result, Maryland becomes the third state, following Delaware and Wyoming, to permit companies to use blockchain-enabled technology for corporate records and communication.
Ms. Bacigalupo told LegalTechNews that the new law provides companies with new ways to enhance their operations and should be leveraged. “Maryland companies can issue and track shares electronically on a real-time basis, meaning that delays, inconsistencies and uncertainty caused by manually recording an issuance or a transfer of shares would be drastically reduced or eliminated. The distinction between record holder and beneficial owner can be eliminated,” she said.