Sec. 33-671. Subscription for shares before incorporation. - Connecticut Statutes

      Sec. 33-671. Subscription for shares before incorporation. (a) A subscription for shares entered into before incorporation is irrevocable for six months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.

      (b) 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.

      (c) 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.

      (d) If a subscriber defaults in payment of money 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 more than twenty days after the corporation sends written demand for payment to the subscriber.

      (e) A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to section 33-672.

      (P.A. 94-186, S. 43, 215.)

      History: P.A. 94-186 effective January 1, 1997.

      Annotations to former section 33-51:

      An implied promise to pay installments arises from stockholder's relation to company, whether he is an original subscriber or receives a certificate as transferee. 12 C. 507; Id., 530; 22 C. 452. Parol conditions annexed to subscription cannot be shown. 13 C. 173. Subscriptions may be enforced after insolvency of corporation. 16 C. 593. Remedy by sale of stock held to be cumulative and not to supersede right to enforce payment of subscription. 20 C. 178. Private agreement limiting subscriber's liability invalid. Id., 186. Estoppel from participating in acts of corporation or receiving dividends to set up irregularities. 66 C. 9; 72 C. 658; 73 C. 378; 134 U.S. 291. Liability as determined by law of state where incorporated. 73 C. 377; 78 C. 590; 79 C. 163; 212 U.S. 567. Corporation cannot release liability as against creditor but may compromise bona fide dispute. 73 C. 477. Liability of woman married in 1872 on stock received by inheritance. 86 C. 468. Liability on subscription to stock of existing corporation; mere promise to subscribe not enough. 89 C. 138. Incorporators cannot enforce payment of stock subscriptions. 107 C. 220. Cited. 113 C. 125. See note to section 33-348.

      Annotations to former section 33-52:

      When there is no bad faith on the part of the corporation, one subscriber cannot escape liability because another has acted in bad faith; but subscriber participating in fraud is estopped to deny subscription. 29 C. 137; 66 C. 9; 72 C. 665; 73 C. 513. Subscription is assignable; acceptance by corporation operates as a novation. 101 C. 291. Contract and liability of subscriber defined. Id., 291. A corporation may refuse to issue stock when consideration therefor has failed. 139 C. 668. See note to section 33-348.

      Annotation to former section 33-342:

      Cited. 185 C. 320.