Sec. 33-671. Subscription for shares before incorporation.
Sec. 33-671. Subscription for shares before incorporation. (a) A subscription
for shares entered into before incorporation is irrevocable for six months unless the
subscription agreement provides a longer or shorter period or all the subscribers agree
to revocation.
(b) The board of directors may determine the payment terms of subscriptions for
shares that were entered into before incorporation unless the subscription agreement
specifies them. A call for payment by the board of directors must be uniform so far as
practicable as to all shares of the same class or series unless the subscription agreement
specifies otherwise.
(c) Shares issued pursuant to subscriptions entered into before incorporation are
fully paid and nonassessable when the corporation receives the consideration specified
in the subscription agreement.
(d) If a subscriber defaults in payment of money or property under a subscription
agreement entered into before incorporation, the corporation may collect the amount
owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and may sell the shares if the debt
remains unpaid more than twenty days after the corporation sends written demand for
payment to the subscriber.
(e) A subscription agreement entered into after incorporation is a contract between
the subscriber and the corporation subject to section 33-672.
(P.A. 94-186, S. 43, 215.)
History: P.A. 94-186 effective January 1, 1997.
Annotations to former section 33-51:
An implied promise to pay installments arises from stockholder's relation to company, whether he is an original subscriber or receives a certificate as transferee. 12 C. 507; Id., 530; 22 C. 452. Parol conditions annexed to subscription
cannot be shown. 13 C. 173. Subscriptions may be enforced after insolvency of corporation. 16 C. 593. Remedy by sale
of stock held to be cumulative and not to supersede right to enforce payment of subscription. 20 C. 178. Private agreement
limiting subscriber's liability invalid. Id., 186. Estoppel from participating in acts of corporation or receiving dividends
to set up irregularities. 66 C. 9; 72 C. 658; 73 C. 378; 134 U.S. 291. Liability as determined by law of state where incorporated.
73 C. 377; 78 C. 590; 79 C. 163; 212 U.S. 567. Corporation cannot release liability as against creditor but may compromise
bona fide dispute. 73 C. 477. Liability of woman married in 1872 on stock received by inheritance. 86 C. 468. Liability
on subscription to stock of existing corporation; mere promise to subscribe not enough. 89 C. 138. Incorporators cannot
enforce payment of stock subscriptions. 107 C. 220. Cited. 113 C. 125. See note to section 33-348.
Annotations to former section 33-52:
When there is no bad faith on the part of the corporation, one subscriber cannot escape liability because another has
acted in bad faith; but subscriber participating in fraud is estopped to deny subscription. 29 C. 137; 66 C. 9; 72 C. 665; 73
C. 513. Subscription is assignable; acceptance by corporation operates as a novation. 101 C. 291. Contract and liability of
subscriber defined. Id., 291. A corporation may refuse to issue stock when consideration therefor has failed. 139 C. 668.
See note to section 33-348.
Annotation to former section 33-342:
Cited. 185 C. 320.