Originally from:
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Hardcover
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Electronic
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CHAPTER 12
PREINCORPORATION SUBSCRIPTIONS
TO STOCK AND OTHER INVESTMENTS
IN THE CORPORATION
Section
§ 12.01 Introduction
§ 12.02 Definition of Subscription
§ 12.03 Subscription versus Purchase
§ 12.04 Liabilities of the Subscriber
§ 12.05 Liabilities of the Corporate Entity
§ 12.06 Subscriptions after Incorporation
§ 12.07 Oversubscription
§ 12.08 Time for Payment Pursuant to Subscriptions
§ 12.09 Other Legal Issues Surrounding Subscriptions
§ 12.01 Introduction
This Chapter examines the initial financing of the corporation through
the subscription of stock. Section 12.02 begins by explaining what a
subscription is, and Section 12.03 distinguishes the subscription from the
purchase of stock. Liabilities of the subscriber and of the corporation for
preincorporation subscriptions are examined in Sections 12.04 and 12.05.
The postincorporation subscription is discussed in Section 12.06. Section
12.07 addresses oversubscription. This Chapter concludes with sections
discussing time of payment and other legal issues pursuant to the
stocksubscription in Sections 12.08 and 12.09, respectively.
§ 12.02 Definition of Subscription
A subscription is a written offer to buy capital stock from a corporation
when the stock is issued. The corporation may issue shares of stock of the
class as authorized by its articles of incorporation. If the corporation has
not yet come into existence, the offer is called a preincorporation
subscription. Promoters seek preincorporation subscriptions to finance the
proposed corporation. Existing corporations use subscriptions to sell new
issues of stock. The person offering to buy the stock when it is issued is
called the subscriber.
Roger J. Magnuson is a Partner at Dorsey and Whitney, LLP, where he serves as Head of the National Strategic Litigation Group and has practiced since 1973. He has been recognized as one of the top trial lawyers in the United States by major national and international publications, including Chambers International Guide to American Lawyers, which profiles the top 500 trial lawyers in the United States, Best Lawyers in America, Who's Who in American Law, and Who's Who in America. Mr. Magnuson was also recognized by a Journal of Law and Politics' survey for Judge's Choice "Wins Most Cases."
Some high profile cases that he has litigated include representation of the Florida Senate in the Bush v. Gore election controversy in 2000; and representation of the Plaintiffs in the widely publicized and studied Mall of America case. For several years he has represented, among other persons and entities, the Minnesota Twins and Major League Baseball principals and players in litigation; and has litigated national and local cases in federal and state court venues. He has appealed before the Supreme Court in a number of cases; as well as the Minnesota Supreme Court. He has authored several articles and 7 books.
Richard A. Saliterman is a Principal in Saliternan & Siefferman P.C., a full-service firm in Minneapolis established in 1976. Mr. Saliterman is a leading expert on corporate business matters, and is the author of several publications on business start-ups, franchises, and trademarks. Mr. Saliterman is the former National Judge Advocate for the U.S. Navy League, based in Washington D.C.
Contributing Editor:
Amanda Chang
Contributing Authors:
Alecia Anderson
Seth Back
John Baker
Shannon Berg
Constatin Burachek
Benjamin Carpenter
Ryan Check
Carl Christensen
Peter Fear
Michael Frasier
Aaron Hall
Catherine Hanson
Paul Harman
Amy Ithlan
Michael Kern
Chris Kuhlman
Brett Larson
Joshua Lederman
Karen Lundquist
James Magnuson
Jennifer Mead
Rao Menier
Heidi Miller
Rachael Moxon
Oliver Nelson
Scott Peitzer
Mitchell Skinner
Jonathan Stechmann
Lael Weinberger
Jonathan Wilson
Alex Zumbulyadis
