Mich. Comp. Laws » Michigan Compiled Laws / Chapter 450 / Act 284 of 1972
Michigan Compiled Laws

Mich. Comp. Laws § 450.1306 (2026)

Subscription for shares; payment; call; security interest.

✓ current as of July 2026
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BUSINESS CORPORATION ACT


Act 284 of 1972


450.1306 Subscription for shares; payment; call; security interest.

Sec. 306.

    (1) Unless otherwise provided in the subscription agreement:

    (a) A subscription for shares made before or after organization of a corporation shall be paid in full at the time, or in installments and at the times, as shall be determined by the board.

    (b) A call made by the board for payment on subscriptions shall be ratable as to all shares of the same class or as to all shares of the same series.

    (c) A corporation may retain a security interest in any shares as security for performance by the subscriber of his or her obligations under a subscription agreement and subject to the power of sale or rescission upon default provided in section 307.

History: 1972, Act 284, Eff. Jan. 1, 1973 ;-- Am. 1989, Act 121, Eff. Oct. 1, 1989

Notes of Decisions
Cited in 2 cases, 1975–1993 · leading case: Rare Earth, Inc. v. Hoorelbeke, 401 F. Supp. 26 (S.D.N.Y. 1975).
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Rare Earth, Inc. v. Hoorelbeke, 401 F. Supp. 26 (S.D.N.Y. 1975). “Mich.Comp.Laws Ann. § 450.1306. (1) The consideration for the issuance of shares may be paid, in whole or in part, in money or other property, tangible or intangible, or in services performed or to be performed for the corporation or for its benefit or in its organization or…”
Huspen v. T & H, Inc, 504 N.W.2d 17 (Mich. Ct. App. 1993). “] At the time the shares were issued in this case, MCL 450.1306(c); MSA 21.200(306)(c) provided: A corporation may retain any shares as security *165 for performance by the subscriber of his obligation under a subscription agreement and subject to the power of sale or rescission…”
— Mich. Comp. Laws § 450.1306(c) — 1 case
Huspen v. T & H, Inc, 504 N.W.2d 17 (Mich. Ct. App. 1993). “] At the time the shares were issued in this case, MCL 450.1306(c); MSA 21.200(306)(c) provided: A corporation may retain any shares as security *165 for performance by the subscriber of his obligation under a subscription agreement and subject to the power of sale or rescission…”
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