§ 10A-2-6.20 — Subscription for Shares Before Incorporation

Alabama § 10A-2-6.20

• Jurisdiction: Alabama
• Title 10A: Alabama Business and Nonprofit Entities Code
• Ch. 2: Business Corporations
• Art. 6: Shares and Distributions
• Div. B: Issuance of Shares

Text

REPEALED IN THE 2019 REGULAR SESSION BY ACT 2019-94 EFFECTIVE JANUARY 1, 2020. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.
(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 terminate the agreement and may sell the shares if the debt remains unpaid more than 10 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 10A-2-6.21.

Legislative History

(Acts 1994, No. 94-245, p. 343, §1; §10-2B-6.20; amended and renumbered by Act 2009-513, p. 967, §100.)