§ 4-26-716 — Liability of subscribers and shareholders

(a) A holder of or subscriber to shares of a corporation shall be under no obligation to the corporation or its creditors with respect to the shares other than the obligation to pay to the corporation the full consideration fixed as provided by law for which those shares were issued or to be issued. (b) (1) Every original holder of watered shares or of shares not fully paid as agreed shall continue liable thereon to the corporation notwithstanding any transfer of the shares. (2) A transferee of the shares shall not be liable thereon if he or she acquired them in good faith without knowledge or notice that they were watered shares or shares not fully paid as agreed or if he or she acquired them from a transferor similarly free from liability. The burden of proof that the transferee did not so acquire the shares shall be upon the adverse party. (c) An executor, administrator, conservator, guardian, trustee, assignee for the benefit of creditors, or receiver shall not be personally liable to the corporation as a holder of or subscriber to shares of a corporation, but the estate and funds in his or her hands shall be so liable. (d) No pledgee or other holder of shares as collateral security shall be personally liable as a shareholder.

Legislative History

Acts 1965, No. 576, § 25; A.S.A. 1947, § 64-210.