In Maryland officers and directors who act in good faith are entitled to immunity from corporate liabilities:
“In good faith; In a manner he reasonably believes to be in the best interests of the corporation; and with the care that an ordinarily prudent person in a like position would use under similar circumstances.”
See MD Code, Corporations and Associations, § 2-405.1 and MD Code, Courts and Judicial Proceedings, § 5-417
However, this immunity does not apply to individual actions committed by an individual (for example causing an accident while driving a company car or operating the company’s saw mill).
Whether or not an officer or director is immune from suit, this is why all corporations and their boards should have good insurance to pay for the costs of defending against lawsuits. Liability insurance for Officers and Directors Coverage in Maryland is relatively modest in cost because officers and directors are rarely liable for corporation claims.
Regarding the normal duties for a non-stock not for profit corporation in Maryland, there are only a few things necessary to maintain the corporation in good standing.
The corporation should file its Maryland Personal Property Tax Return by April every year.
The corporation should file its State and Federal Income Tax return every year (Federal Form 990). A copy of the Federal Form 990 gets filed with the Maryland Secretary of State as part of the charitable registration process.
The corporation should register with the Maryland Secretary of State in Annapolis.
The corporation should have at least one annual meeting of its members and directors (even if there are no members other than directors)
The purpose of the meeting is to appoint officers and to continue the directors in office. If no meeting is held the last acting directors and officers continue in their capacities until replacements are appointed.
Standard Bylaws for a non-profit are easy to obtain from numerous sources.
The annual meeting should include the following items:
ORDER OF BUSINESS.
The order of business at all meeting of the members shall be as follows:
a. Roll Call.
b. Proof of notice of meeting or waiver of notice.
c. Reading of minutes of preceding meeting.
d. Reports of Officers. (usually treasurer’s financial report)
e. Reports of Committees.
f. Election of Directors.
g. Unfinished Business.
h. New Business.
Keeping minutes of meetings is a good idea so that there is a paper record that you acted responsibly as a board of a corporation.
There is no magic required language for minutes. The most important thing is to record that a meeting occurred at a place, date and time.
State who was present at the meeting, and describe what business was discussed, and what actions were taken.
Keep a copy of all minutes in the corporation’s records, so you can later remember what transpired at meetings over the years.
