COLUMN: It’s about time for stock ledgers on the blockchain
On April 30, 2019, Maryland’s governor signed into law a bill that allows for Maryland incorporated companies to maintain their stock ledgers on the blockchain. Maryland is now part of an elite club of states that allow this, Delaware being the most notable given that it is home to two-thirds of listed Fortune 500 companies and 85% of the IPOs in the United States.
According to Morrison and Foerster, a law firm deeply involved in the Maryland amendments, “these amendments also permit a company to transmit communications (such as annual statements and stockholder notices) by means of a distributed electronic network or database, which includes by means of blockchain technology. The amendments further permit a company to have its records “maintained by or on [the company’s] behalf” (rather than requiring the company itself to maintain its records, as was previously required by the statute), recognizing that a stock ledger does not need to be administered directly by an individual (i.e., a corporate officer or a transfer agent), thus enabling the use of blockchain technology for the creation and administration of corporate records. Other amendments were enacted to clarify that written consents and requests required or permitted by the Maryland General Corporation Law may be given by “electronic transmission,” which includes through the use of blockchain technology.”[1]