2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 13. CORPORATE GOVERNANCE CHAPTER 2. ISSUANCE OF SHARES
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IC 28-13-2
Chapter 2. Issuance of Shares
IC 28-13-2-1
Subscription for shares; terms; call for payment; nonassessable
shares; default in payment
Sec. 1. (a) A subscription for shares entered into before
incorporation is irrevocable for six (6) months unless the
subscription agreement provides a longer or shorter period or all the
subscribers agree to revocation.
(b) The board of directors may determine the payment terms of
subscriptions for shares that were entered into before incorporation,
unless the subscription agreement specifies terms. A call for payment
by the board of directors must 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 under subscriptions entered into before
incorporation are fully paid and nonassessable when the corporation
receives the consideration specified in the subscription agreement.
(d) If a subscriber defaults in payment of money or property under
a subscription agreement entered into before incorporation, the
corporation may collect the amount owed as any other debt.
Alternatively, unless the subscription agreement provides otherwise,
the corporation may rescind the agreement and may sell the shares if
the debt remains unpaid more than twenty (20) days after the
corporation sends written demand for payment to the subscriber.
As added by P.L.14-1992, SEC.163.
IC 28-13-2-2
Subscription agreement; powers of directors; consideration;
escrowed or restricted shares for future services or benefits
Sec. 2. (a) A subscription agreement entered into after
incorporation is a contract between the subscriber and the
corporation subject to this section.
(b) The powers granted in this section to the board of directors
may be reserved to the shareholders by the articles of incorporation.
(c) The board of directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or
benefit to the corporation, including the following:
(1) Cash.
(2) Promissory notes.
(3) Services performed.
(4) Contracts for services to be performed.
(5) Other securities of the corporation. If shares are authorized
to be issued for promissory notes or for promises to provide
services in the future, the corporation shall report in writing to
the shareholders the number of shares authorized to be so issued
with or before the notice of the next shareholders' meeting.
However, a corporation that is subject to the Securities
Exchange Act of 1934, as amended, satisfies the reporting
requirement of this subsection by complying with the proxy
disclosure provisions of that act.
(d) The corporation may issue shares for the consideration
received or to be received as the board of directors determines to be
adequate. The determination by the board of directors is conclusive
with regard to the adequacy of consideration for the issuance of
shares and with regard to whether the shares are validly issued, fully
paid, and nonassessable.
(e) When the corporation receives the consideration for which the
board of directors authorized the issuance of shares, the shares issued
are fully paid and nonassessable.
(f) The corporation may place in escrow shares issued for a
contract for future services or benefits or a promissory note or make
other arrangements to restrict the transfer of the shares and may
credit distributions in respect of the shares against the purchase price
until the services are performed, the note is paid, or the benefits
received. If the services are not performed, the note is not paid, or the
benefits are not received, the shares escrowed or restricted and the
distributions credited may be canceled in whole or in part.
As added by P.L.14-1992, SEC.163. Amended by P.L.1-1993,
SEC.210.
IC 28-13-2-3
Shareholder liability for corporate acts or indebtedness
Sec. 3. (a) A purchaser from a corporation of the corporation's
own shares is not liable to the corporation or the corporation's
creditors with respect to the shares except to pay the consideration
for which the shares were authorized to be issued or specified in the
subscription agreement.
(b) Unless otherwise provided in the articles of incorporation, a
shareholder of a corporation is not personally liable for the acts or
debts of the corporation except that the shareholder may become
personally liable by reason of the shareholder's own acts or conduct.
As added by P.L.14-1992, SEC.163.
IC 28-13-2-4
Pro rata shares; share dividend or split; record date of dividend
Sec. 4. (a) Unless the articles of incorporation provide otherwise,
shares may be issued pro rata and without consideration to the
corporation's shareholders or to the shareholders of at least one (1)
class or series. An issuance of shares under this subsection may be
in the form of a share dividend or a share split, but shall be
considered a share dividend for purposes of this article.
(b) Shares of one (1) class or series may not be issued as a share
dividend in respect of shares of another class or series unless:
(1) the articles of incorporation so authorize;
(2) a majority of the votes entitled to be cast by the class or
series to be issued approve the issue; or
(3) there are no outstanding shares of the class or series to be
issued.
(c) If the board of directors does not fix the record date for
determining shareholders entitled to a share dividend, the record date
is the date the board of directors authorizes the share dividend.
As added by P.L.14-1992, SEC.163.
IC 28-13-2-5
Purchase rights, options, or warrants; corporate shares or other
securities
Sec. 5. A corporation, acting through the corporation's board of
directors, may create or issue rights, options, or warrants for the
purchase of shares or other securities of the corporation or any
successor in interest of the corporation. The board of directors shall
determine the terms upon which the rights, options, or warrants are
issued, their form and content, and the consideration for which the
shares or other securities are to be issued. The rights, options, or
warrants may be issued with or without consideration and may be
issued pro rata.
As added by P.L.14-1992, SEC.163.
IC 28-13-2-6
Share certificates; contents; requisites; validity of signature
Sec. 6. (a) Shares may be represented by certificates. Unless this
article or another statute expressly provides otherwise, the rights and
obligations of shareholders of the same class or series of shares are
identical whether or not the shares are represented by certificates.
(b) At a minimum each share certificate must state on the
certificate face the following:
(1) The name of the issuing corporation and that the corporation
is organized under Indiana law.
(2) The name of the person to whom issued.
(3) The number and class of shares and the designation of the
series, if any, the certificate represents.
(c) If the issuing corporation is authorized to issue different
classes of shares or different series within a class:
(1) the designations, relative rights, preferences, and limitations
applicable to each class and the variations in rights, preferences,
and limitations determined for each series and the authority of
the board of directors to determine variations for future series
must be summarized on the front or back of each certificate; or
(2) each certificate may state conspicuously on the front or back
that the corporation will furnish the shareholder this
information on request in writing and without charge.
(d) Each share certificate:
(1) must be signed either manually or in facsimile by at least
two (2) officers designated in the bylaws or by the board of
directors; and
(2) may bear the seal or a facsimile of the seal of the
corporation.
(e) If the person who signed either manually or in facsimile a
share certificate no longer holds office when the certificate is issued,
the certificate remains valid.
As added by P.L.14-1992, SEC.163. Amended by P.L.79-1998,
SEC.89.
IC 28-13-2-7
Classes or series of shares without certificates; furnishing
shareholder information
Sec. 7. (a) Unless the articles of incorporation or bylaws provide
otherwise, the board of directors of a corporation may authorize the
issue of some or all of the shares of any or all classes or series
without certificates. The authorization does not affect shares already
represented by certificates until the certificates are surrendered to the
corporation.
(b) Within a reasonable time after the issue or transfer of shares
without certificates, the corporation shall send the shareholder a
written statement of the information required on certificates by
section 6(b) and 6(c) of this chapter, and, if applicable, section 8 of
this chapter.
As added by P.L.14-1992, SEC.163.
IC 28-13-2-8
Shares subject to registration or transfer restrictions; previously
issued shares; enforcement of restrictions against holder or
transferee
Sec. 8. (a) For purposes of this section, "shares" includes a
security convertible into or carrying a right to subscribe for or
acquire shares.
(b) The articles of incorporation, bylaws, an agreement among
shareholders, or an agreement between shareholders and the
corporation may impose restrictions on the transfer or registration of
transfer of shares of any class or series of shares of the corporation.
A restriction does not affect shares issued before the restriction was
adopted unless the holders of the shares are parties to the restriction
agreement or voted in favor of the restriction.
(c) A restriction on the transfer or registration of transfer of shares
is valid and enforceable against the holder or a transferee of the
holder if the restriction is authorized by this section and the
restriction's existence is noted conspicuously on the front or back of
the certificate or is contained in the information statement required
by section 7(b) of this chapter. Unless so noted, a restriction is not
enforceable against a person without knowledge of the restriction.
(d) A restriction on the transfer or registration of transfer of shares
is authorized:
(1) to preserve exemptions under federal or state securities law;
or
(2) for any other reasonable purpose.
(e) A restriction on the transfer or registration of transfer of shares
may do any of the following:
(1) Obligate the shareholder first to offer the corporation or
other persons separately, consecutively, or simultaneously an
opportunity to acquire the restricted shares.
(2) Obligate the corporation or other persons separately,
consecutively, or simultaneously to acquire the restricted
shares.
(3) Require the corporation, the holders of any class of its
shares, or another person to approve the transfer of the
restricted shares, if the requirement is not manifestly
unreasonable.
(4) Prohibit the transfer of the restricted shares to designated
persons or classes of persons, if the prohibition is not
manifestly unreasonable.
As added by P.L.14-1992, SEC.163.
IC 28-13-2-9
Expenses payable from consideration received for shares
Sec. 9. A corporation may pay the expenses of:
(1) selling or underwriting the corporation's shares; and
(2) organizing or reorganizing the corporation;
from the consideration received for shares.
As added by P.L.14-1992, SEC.163.
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