§ 1524 — Payment for shares

Pennsylvania § 1524

• Jurisdiction: Pennsylvania
• Title 15: CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
• Part: PART II
• Ch. 15: CORPORATE POWERS, DUTIES AND SAFEGUARDS
• Subch.: SHARES AND OTHER SECURITIES

Text

(a) General rule.--Consideration for shares, unless otherwise restricted in the bylaws:

(1) May consist of money, obligations (including an obligation of a shareholder), services performed whether or not contracted for, contracts for services to be performed, shares or other securities or obligations of the issuing business corporation, or any other tangible or intangible property or benefit to the corporation. If shares are issued for other than money, the value of the consideration shall be determined by or in the manner provided by the board of directors.

(2) Shall be provided or paid to or as ordered by the corporation.

(b) Issuance without consideration.--Except as otherwise restricted in the bylaws, upon authorization by the board of directors, the corporation may issue or distribute its own shares pro rata to its shareholders or the shareholders of one or more classes or series, if the relative rights of the holders of any class or series are not adversely affected thereby, to effectuate stock dividends or splits, and any such transaction shall not require payment of consideration.

(c) Status of issued shares.--Except as provided in subsection (e), all issued shares of a business corporation shall be deemed fully paid regardless of failure to pay in full the agreed consideration therefor. Except as otherwise provided by a regulatory statute controlling under section 103(c) (relating to structural provisions in regulatory statutes controlling), all issued shares of a corporation shall be nonassessable. This subsection shall not affect the personal obligation of a subscriber for shares of a corporation to pay the agreed consideration for the shares.

(d) Rights of subscribing shareholder.--Notwithstanding any other provision of this subpart, the right to vote, to receive dividends and to have and exercise the other rights of a shareholder prior to payment in full of the agreed consideration for the shares of a shareholder who has acquired his shares by subscription may be denied or limited as provided in the subscription agreement. Any such denial or limitation of rights shall be noted conspicuously on the face or back of the share certificate, if any, or in the notice provided by section 1528(f) (relating to uncertificated shares). Unless so noted, such denial or limitation (even though permitted by this section) shall be ineffective except against a person with actual knowledge of the denial or limitation.

(e) Transitional provision.--A corporation may enforce calls on partly paid shares outstanding on September 30, 1989, in the same manner and to the same extent as if this subpart had not been enacted.

Legislative History

(Dec. 19, 1990, P.L.834, No.198, eff. imd.; Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) 1992 Amendment.Act 169 amended subsec. (a). 1990 Amendment.Act 198 amended subsecs. (a), (c) and (e). Cross References.Section 1524 is referred to in sections 1106, 1528 of this title.