A pre-incorporation share subscription is generally binding for six months, the board can set payment terms and make payment calls unless the agreement says otherwise, and the corporation can collect overdue amounts and the board can settle disputes. Written subscriptions are required for enforceability.
10-620 - Subscription for shares 10-620 . Subscription for shares A. A subscription for shares entered into before incorporation is irrevocable by the subscriber for a period of six months from the date of the subscription agreement, unless the subscription agreement provides a longer or shorter period or all of the subscribers agree to revocation. B. The board of directors may determine the payment terms of subscriptions for shares, unless the subscription agreement specifies them. Any call made by the board of directors for payment on subscriptions shall be uniform as 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 shall be fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement. D. If a subscriber defaults in the payment of money or property when due under a subscription agreement, the corporation may collect the amount due in the same manner as any other debt. The subscription agreement may prescribe other penalties for failure to pay installments or calls that may become due, except that no penalty working a rescission or forfeiture of a subscription or of the amounts paid on a subscription may be declared as against any subscriber unless the subscriber fails to cure the default within twenty days after the corporation sends written notice of the default to the subscriber at his last known address. Subject to the foregoing, the board of directors may release, settle or compromise, on such terms and conditions as it deems appropriate, any subscription for shares or any dispute or action arising out of a subscription for shares, unless the subscription agreement provides otherwise. E. A subscription for shares, whether entered into before or after incorporation, is not enforceable unless it is in writing and signed by the party to be charged or his agent.