Missouri § 351.185 - Consideration for shares — exchange or conversion of shares.

§ 351.185. Consideration for shares — exchange or conversion of shares.

1.  Shares having a par value shall be issued for such consideration not less than the par value thereof as shall be fixed from time to time by the board of directors.  Shares without par value may be issued for such consideration as may be fixed from time to time by the board of directors unless the articles of incorporation reserve to the shareholders the right to fix the consideration.  Shares of a corporation issued and thereafter acquired by it may be disposed of by the corporation for such consideration as may be fixed from time to time by the directors.  That part of the surplus of a corporation which is transferred to stated capital upon the issuance of a share dividend shall be deemed to be the consideration for the issuance of such shares.

2.  In the event of the conversion or exchange of any issued shares, with or without par value, into or for other shares of the corporation, whether of the same or of a different class or classes and whether with or without par value, the consideration for the shares so issued in such conversion or exchange is deemed to be:

(1)  The consideration originally received for the shares so converted or exchanged, and

(2)  That part of surplus, if any, transferred to stated capital upon the issuance of shares for the shares so converted or exchanged, and

(3)  Any additional consideration paid to the corporation upon the issuance of shares for the shares so exchanged or converted.  

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3.  When payment of the consideration for which shares are to be issued shall have been received by the corporation, the shares are full-paid and nonassessable.  In the absence of actual fraud in the transaction, the judgment of the board of directors or the shareholders, as the case may be, as to the value of the consideration received for shares shall be conclusive.

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(L. 1943 p. 410 § 19, A.L. 1961 p. 248, A.L. 1977 S.B. 115)

(1960) Where director purchased treasury stock of the corporation for twenty dollars a share and subsequently resold it for twenty-five dollars a share upon sale ordered by the board of directors but which was not advertised and of which no notice was given to other stockholders, sale of the stock would be set aside, but the director should be reimbursed for the amount paid to the corporation for his stock. Johnson v. Duensing (A.), 340 S.W.2d 758.

(1966) In the absence of actual fraud in the sale of shares to officers and key employees of corporation under stock option plan, the judgment of the board of directors as to the value of the consideration received for the shares will not be interfered with, Saigh v. Busch (Mo.), 403 S.W.2d 559.

(1996)  When sections 351.410, 351.185 and 351.447, RSMo, are used in conjunction for a merger, the more specific statute overrides the general, and a vote is required.  Kansas City Power & Light v. Western Resources, 939 F.Supp. 688 (W.D. Mo.).

---- end of effective  28 Aug 1977 ----

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