13.1-643 - Issuance of shares. - Virginia Statutes

§ 13.1-643. Issuance of shares.

A. The powers granted in this section to the board of directors may bereserved to the shareholders by the articles of incorporation.

B. Any issuance of shares must be authorized by the board of directors.Shares may be issued for consideration consisting of any tangible orintangible property or benefit to the corporation, including cash, promissorynotes, services performed, contracts for services to be performed, or othersecurities of the corporation.

C. A good faith determination by the board of directors that theconsideration received or to be received for the shares to be issued isadequate is conclusive insofar as the adequacy of consideration relates towhether the shares are validly issued, fully paid and nonassessable. When theboard of directors has made such a determination and the corporation hasreceived the consideration, the shares issued therefor are fully paid andnonassessable.

D. The corporation may place in escrow shares issued for a contract forfuture services or benefits or a promissory note, or make other arrangementsto restrict the transfer of the shares, and may credit distributions inrespect of the shares against their purchase price, until the services areperformed, the benefits are received or the note is paid. If the services arenot performed, the benefits are not received or the note is not paid, theshares escrowed or restricted and the distributions credited may be canceledin whole or part.

E. Where it cannot be determined that outstanding shares are fully paid andnonassessable, there shall be a conclusive presumption that such shares arefully paid and nonassessable if the board of directors makes a good faithdetermination that there is no substantial evidence that the fullconsideration for such shares has not been paid.

(Code 1950, §§ 13-97, 13-98, 13.1-15, 13.1-17; 1956, c. 428; 1958, c. 564;1964, c. 352; 1972, c. 580; 1975, c. 500; 1985, c. 522.)