§ 503 — Subscription for shares; time of payment, forfeiture for default

§ 503. Subscription for shares; time of payment, forfeiture for default.\n (a) Unless otherwise provided by the terms of the subscription, a\nsubscription for shares of a corporation to be formed shall be\nirrevocable, except with the consent of all other subscribers or the\ncorporation, for a period of three months from its date.\n (b) A subscription, whether made before or after the formation of a\ncorporation, shall not be enforceable unless in writing and signed by\nthe subscriber.\n (c) Unless otherwise provided by the terms of the subscription,\nsubscriptions for shares, whether made before or after the formation of\na corporation, shall be paid in full at such time, or in such\ninstallments and at such times, as shall be determined by the board.\nAny call made by the board for payment on subscriptions shall be uniform\nas to all shares of the same class or of the same series. If a receiver\nof the corporation has been appointed, all unpaid subscriptions shall be\npaid at such times and in such installments as such receiver or the\ncourt may direct.\n (d) In the event of default in the payment of any installment or call\nwhen due, the corporation may proceed to collect the amount due in the\nsame manner as any debt due the corporation or the board may declare a\nforfeiture of the subscriptions. The subscription agreement may\nprescribe other penalties, not amounting to forfeiture, for failure to\npay installments or calls that may become due. No forfeiture of the\nsubscription shall be declared as against any subscriber unless the\namount due thereon shall remain unpaid for a period of thirty days after\nwritten demand has been made therefor. If mailed, such written demand\nshall be deemed to be made when deposited in the United States mail in a\nsealed envelope addressed to the subscriber at his last post office\naddress known to the corporation, with postage thereon prepaid. Upon\nforfeiture of the subscription, if at least fifty percent of the\nsubscription price has been paid, the shares subscribed for shall be\noffered for sale for cash or a binding obligation to pay cash at a price\nat least sufficient to pay the full balance owed by the delinquent\nsubscriber plus the expenses incidental to such sale, and any excess of\nnet proceeds realized over the amount owed on such shares shall be paid\nto the delinquent subscriber or to his legal representative. If no\nprospective purchaser offers a cash price or a binding obligation to pay\ncash sufficient to pay the full balance owed by the delinquent\nsubscriber plus the expenses incidental to such sale, or if less than\nfifty percent of the subscription price has been paid, the shares\nsubscribed for shall be cancelled and restored to the status of\nauthorized but unissued shares and all previous payments thereon shall\nbe forfeited to the corporation and transferred to surplus.\n (e) Notwithstanding the provisions of paragraph (d) of this section,\nin the event of default in payment or other performance under the\ninstrument evidencing a subscriber's binding obligation to pay a portion\nof the subscription price or perform services, the corporation may\npursue such remedies as are provided in such instrument or a related\nagreement or under law.\n