1. A subscription for shares entered into before incorporation shall be in writing, and any such subscription shall be irrevocable for six (6) months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.
  2. The board of directors may determine the payment terms of subscriptions for shares that were entered into before incorporation, unless the subscription agreement specifies them. A call for payment by the board of directors must be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.
  3. Terms Used In Tennessee Code 48-16-201

    • board of directors: means the governing board of a corporation, whether denominated the board of directors or otherwise, except that no person or group of persons is the board of directors because of powers delegated to that person or group pursuant to §. See Tennessee Code 48-51-201
    • Class: when used with reference to membership interests, means a category of membership interests that differs in one (1) or more rights or preferences from another category of membership interests of the LLC. See Tennessee Code 48-202-101
    • Contract: A legal written agreement that becomes binding when signed.
    • 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.
    • Directors: means natural persons, designated in the charter or bylaws or elected or appointed by the incorporators, and their successors and natural persons elected or appointed to act as members of the board, irrespective of the names or titles by which such persons are described. See Tennessee Code 48-51-201
    • Property: includes both personal and real property. See Tennessee Code 1-3-105
    • Series: means a category of membership interests, within a class of membership interests, that have some of the same rights and preferences as other membership interests within the same class, but that differ in one (1) or more rights and preferences from another category of membership interests within that class. See Tennessee Code 48-202-101
    • Subscriber: means a person who subscribes for shares in a corporation, whether before or after incorporation. See Tennessee Code 48-11-201
    • Subscription: includes a mark, the name being written near the mark and witnessed. See Tennessee Code 1-3-105
    • written: means any information in the form of a document. See Tennessee Code 48-11-201

  4. Shares issued pursuant to subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.
  5. If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and may sell the shares if the debt remains unpaid more than twenty (20) days after the corporation sends written demand for payment to the subscriber.
  6. A subscription agreement entered into after incorporation shall be in writing and is a contract between the subscriber and the corporation subject to § 48-16-202.