§ 55-6-20. Subscription for shares before incorporation. - North Carolina Statutes

Part 2. Issuance of Shares.

§ 55‑6‑20. Subscription for shares before incorporation.

(a)        A subscription forshares entered into before incorporation is irrevocable for six months unlessthe subscription agreement provides a longer or shorter period or all thesubscribers agree to revocation.

(b)        The board ofdirectors may determine the payment terms of subscriptions for shares that wereentered into before incorporation, unless the subscription agreement specifiesthem.  A call for payment by the board of directors must be uniform so far aspracticable as to all shares of the same class or series, unless thesubscription agreement specifies otherwise.

(c)        Shares issuedpursuant to subscriptions entered into before incorporation are fully paid andnonassessable when the corporation receives the consideration specified in thesubscription agreement.

(d)        If a subscriberdefaults in payment of money or property under a subscription agreement enteredinto before incorporation, the corporation may collect the amount owed as anyother debt.  Alternatively, unless the subscription agreement providesotherwise, the corporation may rescind the agreement and may sell the shares ifthe debt remains unpaid more than 20 days after the corporation sends writtendemand for payment to the subscriber.

(e)        A subscriptionagreement entered into after incorporation is a contract between the subscriberand the corporation subject to G.S. 55‑6‑21. (1901,c. 2, ss. 23, 24, 25; Rev., ss. 1169, 1170, 1171; C.S., s. 1165; G.S., s. 55‑70;1955, c. 1371, s. 1; 1969, c. 751, s. 18; 1985, c. 117, s. 2; 1989, c. 265, s.1.)