Maryland Courts Abstain from Resolving Disputes Between Corporate Members if the Corporation was Formed in Another State

Maryland Courts will abstain from intervening in the internal affairs or management disputes of foreign corporations. An “internal affair” is defined as a dispute over an act, committed by a corporation or an agent of that corporation, that affects the complaining party solely in his capacity as a member of the corporation (whether that be as a stockholder, director, or officer). For example, a complaint of harm that is suffered by a person in his capacity as a minority shareholder, where the act complained of is committed by someone acting in his capacity as a majority shareholder, will not be heard by Maryland courts if the corporation is incorporated in another state.