§ 490.620 — Subscription for shares before incorporation

Iowa § 490.620

• Jurisdiction: Iowa
• Title XII: BUSINESS ENTITIES
• Ch. 490: BUSINESS CORPORATIONS

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1. Asubscriptionforsharesenteredintobeforeincorporationisirrevocableforsixmonths
unless the subscription agreement provides a longer or shorter period or all the subscribers
agree to revocation.
2. 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.
3. 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.
4. If a subscriber defaults in payment of cash 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 for more than
twenty days after the corporation delivers a written demand for payment to the subscriber.
5. A subscription agreement entered into after incorporation is a contract between the
subscriber and the corporation subject to section 490.621.