Connecticut § 33-672 - Issuance of shares.

§ 33-672. Issuance of shares.

Sec. 33-672. Issuance of shares. (a) The powers granted in this section to the board of directors may be reserved to the shareholders by the certificate of incorporation.

(b) 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 cash, promissory notes, services performed, contracts for services to be performed or other securities of the corporation.

(c) Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid and nonassessable.

(d) When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.

(e) 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 their 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the benefits are not received, the issuance of the shares escrowed or restricted and the distributions credited may be rescinded in whole or part. Shares whose issuance have been so rescinded shall return to being authorized but unissued.

(f) At the time of authorizing the issuance of convertible shares, the corporation shall provide for and at all times thereafter retain unissued sufficient shares of appropriate classes to satisfy the conversion privileges of all of its issued and outstanding convertible shares.

(P.A. 94-186, S. 44, 215; P.A. 96-271, S. 36, 37, 254.)

History: P.A. 94-186 effective January 1, 1997; P.A. 96-271 amended Subsec. (a) to replace “articles” of incorporation with “certificate” of incorporation and amended Subsec. (e) to provide that “the issuance of the shares escrowed or restricted and the distributions credited may be rescinded” rather than “the shares escrowed or restricted and the distributions credited may be cancelled” and add provision that shares whose issuance have been so rescinded shall return to being authorized but unissued, effective January 1, 1997.