(a) By resolution of its board of directors, a corporation may apply any part of its capital surplus for:
(1) The reduction or elimination of a corporate deficit arising from a loss, however incurred, or from diminution in the value of its assets, but only after earned surplus is exhausted; or
(2) Any other proper corporate purpose.
(b) An application of capital surplus under subsection (a) of this section shall be disclosed to the stockholders of the corporation in its next annual report.
Structure Maryland Statutes
Title 2 - Corporations in General -- Formation, Organization, and Operation
Subtitle 3 - Capital Accounts, Dividends, and Retirement of Shares
Section 2-302 - Capital Account
Section 2-303 - Determination of Amount of Stated Capital and Capital Surplus
Section 2-304 - Application of Capital Surplus
Section 2-305 - Expenses of Organization, Reorganization, and Financing
Section 2-306 - Reduction of Stated Capital
Section 2-308 - Surplus Considered Capital Surplus
Section 2-309 - Distributions; Stock Dividends and Stock Splits
Section 2-310 - Acquisition of Own Stock -- in General
Section 2-310.1 - Redemption of Own Stock -- Open-End Investment Companies
Section 2-310.2 - Shares Held in Fiduciary Capacity for Benefit of Other Class of Shares
Section 2-311 - Restrictions on Making Distributions