Texas Business Organizations Code 21.166 – Preformation Subscription
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(a) The corporation may determine the payment terms of a preformation subscription unless the payment terms are specified by the subscription. The payment terms may authorize payment in full on acceptance or by installments.
(b) Unless the subscription provides otherwise, a corporation shall make calls placed to all subscribers of similar interests for payment on preformation subscriptions uniform as far as practicable.
Terms Used In Texas Business Organizations Code 21.166
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means an entity governed as a corporation under Title 2 or 7. See Texas Business Organizations Code 1.002
- Subscriber: means a person who agrees with or makes an offer to an entity to purchase by subscription an ownership interest in the entity. See Texas Business Organizations Code 1.002
- Subscription: means an agreement between a subscriber and an entity, or a written offer made by a subscriber to an entity before or after the entity's formation, in which the subscriber agrees or offers to purchase a specified ownership interest in the entity. See Texas Business Organizations Code 1.002
- written: means an expression of words, letters, characters, numbers, symbols, figures, or other textual information that is inscribed on a tangible medium or that is stored in an electronic or other medium that is retrievable in a perceivable form. See Texas Business Organizations Code 1.002
(c) After the corporation is formed, if a subscriber fails to pay any installment or call when due, a corporation may:
(1) collect in the same manner as any other debt the amount due on any unpaid preformation subscription; or
(2) forfeit the subscription if the installment or call remains unpaid for 20 days after written notice to the subscriber.
(d) Although the forfeiture of a subscription terminates all the rights and obligations of the subscriber, the corporation may retain any amount previously paid on the subscription.