§ 28-13-2-2 — Subscription agreement; powers of directors; consideration; escrowed or restricted shares for future services or benefits

Indiana § 28-13-2-2

• Jurisdiction: Indiana
• Art. 13: CORPORATE GOVERNANCE
• Ch. 2: Issuance of Shares

Text

(a) A subscription agreement entered into after
incorporation is a contract between the subscriber and the corporation
subject to this section.
(b) The powers granted in this section to the board of directors may
be reserved to the shareholders by the articles of incorporation.
(c) The board of directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or
benefit to the corporation, including the following:
(1) Cash.
(2) Promissory notes.
(3) Services performed.
(4) Contracts for services to be performed.
(5) Other securities of the corporation. If shares are authorized to
be issued for promissory notes or for promises to provide services
in the future, the corporation shall report in writing to the
shareholders the number of shares authorized to be so issued with
or before the notice of the next shareholders' meeting. However,
a corporation that is subject to the Securities Exchange Act of
1934, as amended, satisfies the reporting requirement of this
subsection by complying with the proxy disclosure provisions of
that act.
(d) The corporation may issue shares for the consideration received
or to be received as the board of directors determines to be adequate.
The determination by the board of directors is conclusive with regard
to the adequacy of consideration for the issuance of shares and with
regard to whether the shares are validly issued, fully paid, and
nonassessable.
(e) When the corporation receives the consideration for which the
board of directors authorized the issuance of shares, the shares issued
are fully paid and nonassessable.
(f) The corporation may place in escrow shares issued for a contract
for future services or benefits or a promissory note or make other
arrangements to restrict the transfer of the shares and may credit
distributions in respect of the shares against the purchase price until the
services are performed, the note is paid, or the benefits received. If the
services are not performed, the note is not paid, or the benefits are not
received, the shares escrowed or restricted and the distributions
credited may be canceled in whole or in part.

Legislative History

As added by P.L.14-1992, SEC.163. Amended by P.L.1-1993, SEC.210.