§ 7-1.2-604 - Issuance of and consideration for shares. - Rhode Island Statutes

SECTION 7-1.2-604

   § 7-1.2-604  Issuance of and considerationfor shares. – (a) Shares with par value may be issued for such consideration having a valuenot less than the par value thereof, as determined from time to time by theboard of directors, or by the shareholders if the articles of incorporation soprovide.

   (b) Shares without par value may be issued for suchconsideration as is determined from time to time by the board of directors, orby the shareholders if the articles of incorporation so provide.

   (c) The board of directors may authorize shares to be issuedfor consideration consisting of any tangible or intangible property or benefitto the corporation, including cash, promissory notes, services performed,contracts for services to be performed or other securities of the corporation.

   (d) Before the corporation issues shares, the board ofdirectors must determine that the consideration received or to be received forshares to be issued is adequate. The determination by the board of directors isconclusive insofar as the adequacy of consideration for the issuance of theshares relates to whether the shares are validly issued, fully paid andnonassessable.

   (e) When the corporation receives the consideration for whichthe board of directors authorized the issuance of shares, the shares issuedtherefor are fully paid and nonassessable.

   (f) The corporation may place in escrow shares issued for acontract for future services or benefits or a promissory note, or make otherarrangements to restrict the transfer of the shares, and may creditdistributions in respect of the shares against their purchase price, until theservices are performed, the note is paid or the benefits received. If theservices are not performed, the note is not paid, or the benefits are notreceived, the shares escrowed or restricted and the distributions credited maybe cancelled in whole or part.