A subscription for shares of a corporation to be organized shall be irrevocable for a period of six months, unless otherwise provided by the terms of the subscription agreement or unless all of the subscribers consent to the revocation of the subscription. Unless otherwise provided in the subscription agreement, subscriptions for shares, whether made before or after the organization of a corporation, shall be paid in full at such time, or in such installments and at such times, as determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series, as the case may be. In case of default in the payment of any installment or call when the payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. The bylaws may prescribe other penalties for failure to pay installments or calls that may become due, but no penalty working a forfeiture of a subscription, or of the amounts paid thereon, shall be declared as against any subscriber unless the amount due thereon remains unpaid for a period of thirty days after written demand has been made therefor. If mailed, the written demand shall be deemed to be made when deposited in the United States mail in a sealed envelope addressed to the subscriber at his last post-office address known to the corporation, with postage thereon prepaid. In the event of the sale of any shares by reason of any forfeiture, the excess of proceeds realized over the amount due and unpaid on the shares shall be paid to the delinquent subscriber or to his legal representative.

History: 1953 Comp., § 51-24-16, enacted by Laws 1967, ch. 81, § 16.

Compiler's notes. — This section is derived from Section 17 of the ABA Model Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 18A Am. Jur. 2d Corporations §§ 578 to 581, 583.

Shares of corporate stock as subject of execution or attachment, 1 A.L.R. 653.

Bona fide holder of negotiable paper given in payment of a subscription to corporate stock in violation of law, 4 A.L.R. 1330.

Liability upon stock subscription payable in services which are rendered unnecessary by the insolvency of corporation, or other cause, 6 A.L.R. 277.

Right of creditor of insolvent corporation to sue stockholder at law upon unpaid subscription, 7 A.L.R. 100.

Liability on unpaid subscription, of transferees of stock issued in exchange for property or services at an overvaluation, 12 A.L.R. 449.

Liability to creditors of stockholders whose stock is forfeited or sold for nonpayment of assessments, 19 A.L.R. 1096.

Payment of stock subscriptions in good will, 24 A.L.R. 1285.

Constructive notice to purchaser or pledgee of stock of corporation's lien thereon, 33 A.L.R. 1272.

When does statute of limitations begin to run against an action by, or in behalf of, creditors of a corporation on unpaid stock or subscriptions, 35 A.L.R. 832.

Pledgee's right to allowance for assessments paid on pledged stock, 40 A.L.R. 268.

Insolvency of corporation as barring stockholder's right to rescind subscription on ground of fraud, 41 A.L.R. 674, 46 A.L.R. 484.

Liability of transferor for calls or assessments as affected by insolvency, fraud, or illegality in transfer, 45 A.L.R. 99, 86 A.L.R. 57.

Liability of transferor for calls or assessments, as affected by failure to enter transfer of stock on corporate books, 45 A.L.R. 137, 104 A.L.R. 638.

Binding effect of subscription to stock in corporation to be formed, 61 A.L.R. 1463.

Who may enforce subscription to stock in corporation to be formed, 61 A.L.R. 1504.

Informality of meeting of directors at which assessment was made as affecting its validity, 64 A.L.R. 714.

Infant's rights and liability on subscription to or purchase of corporate stock, 64 A.L.R. 972.

Liability under trust-fund doctrine of subscribers to stock of corporation the charter of which has been canceled for reasons other than insolvency, 71 A.L.R. 103, 90 A.L.R. 1350.

Necessity and sufficiency of notice of withdrawal of subscription to stock in projected corporation, 71 A.L.R. 1345.

Necessity for knowledge of falsity of representation as to value, inducing subscription to or purchase of corporate stock, or other securities, 73 A.L.R. 1120.

Construction, application, and effect of statutes giving corporation a lien on shares of its stockholders for debts due from stockholders to corporation, 80 A.L.R. 1338.

Validity and effect of extrinsic agreement absolving one, in whole or in part, from liability on subscription to corporate stock, 81 A.L.R. 198.

Priority as between lien of corporation and rights of pledgee or bona fide purchaser of corporate stock, 81 A.L.R. 989.

Exclusiveness of statutory remedy of sale or forfeiture of stock to enforce liability for assessment, 83 A.L.R. 898.

Validity of release, cancelation, or compromise of unpaid subscription for stock by corporation or its representatives, 101 A.L.R. 231.

Constitutionality, construction, and application of statutes which forbid or otherwise regulate compensation for organizing corporation, procuring subscription for stock, or selling its securities, 115 A.L.R. 1362.

Situs of corporate stock (or stock in joint stock company) for purpose of attachment, garnishment, or execution, 122 A.L.R. 338.

Implied obligation of purchaser of corporate stock to indemnify a vendor against future calls and assessments, 141 A.L.R. 1351.

Constitutional or statutory provisions prohibiting municipalities or other subdivisions of the state from subscribing to, or acquiring stock of, private corporation, 152 A.L.R. 495.

Enforcement of stock subscription after suit on note of subscriber is barred by statute of limitations, 11 A.L.R.2d 1380.

18 C.J.S. Corporations §§ 184 to 216.