Louisiana § RS 12:211 - Subscriptions for shares

§ RS 12:211. Subscriptions for shares

A.  Subscriptions for shares, whether made before or after the formation of a corporation, shall be in writing.  Subscriptions for shares may be revoked at any time by either party upon such ground as exists for the rescission of any contract.  

B.  Unless otherwise provided in the writing, or unless all of the subscribers consent to revocation, a subscription for shares of a corporation to be formed shall be irrevocable for a period of one year from the date of signing; but no subscription shall be revocable (except as provided in subsection A of this section) after the corporate existence has begun.  

C.  After the corporate existence has begun, subscriptions for shares, unless revoked as provided in this section, may be enforced by the corporation in its own name according to the subscription terms.  

D.  When no provision as to time of payment is made in the contract of subscription, shares shall be paid for on the call of 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.  

E.  In case of default by a subscriber in any payment due under a contract of subscription, the corporation may at its option (in addition to its right to collect the unpaid amount as provided in subsection C of this section, and in addition to any other remedies provided by law), unless the contract provides otherwise, either (1) cancel the subscription if payment of the full price has not been made before the expiration of fifteen days after demand therefor addressed to the subscriber's last known address by registered mail, in which case the shares shall be considered as unsubscribed, and need no longer be reserved for issuance, or (2) sell the shares of the subscriber at public auction as provided in subsection F of this section.  

F.  In order to exercise its right of sale under subsection E of this section:

(1)  The corporation shall give notice of his default to the subscriber, by registered mail addressed to him at his last known post office address, which notice shall state the time and place of the proposed sale of his shares.  Fifteen days after mailing this notice to the subscriber, the corporation may sell the shares at public auction.  

(2)  Notice of the time and place of the sale, and a brief description of the shares to be sold, shall be published at least three times during the ten days prior to the date of the sale in a newspaper published in the parish in which the registered office of the corporation is located.  However, if no newspaper is published in the parish with sufficient frequency so to publish this notice, one publication shall be sufficient if notice is also posted for ten days at the parish courthouse door.  

(3)  At any sale hereunder, no bid for an amount less than the balance due to the corporation by the shareholder on his shares, plus the costs of the sale, shall be accepted.  

(4)  If no bid is made for a sufficient amount as above provided, the corporation may forthwith forfeit to itself, as liquidated damages, the entire interest or equity of the shareholder in the shares, including all amounts paid to the corporation on account thereof, and the shares shall be considered as unsubscribed and need no longer be reserved for issuance.  

G.  In the event of sale of shares pursuant to subsections E and F of this section, any excess of proceeds realized over the amount due and unpaid on such shares, shall be credited to the delinquent subscriber or his legal representative, to the extent of the subscription price.  

Acts 1968, No. 105, §1.