j. Payment of Balance of Subscription

Payment of Balance of Subscription

Subject to the provisions of the subscription contract, the board of directors may, at any time, declare due and payable to the corporation unpaid subscription and collect the same or such percentage thereof, with accrued interest, if any, as it may deem necessary¹. Payment of the unpaid subscription or any percentage thereof, together with accrued interest, must be made on the date specified in the subscription contract or on the date stated in the call made by the board¹. Failure to pay on the specified date renders the entire balance due and payable and makes the stockholder liable for interest at the legal rate from said date until full payment, unless a different interest rate is provided in the subscription contract¹. If payment is not made within thirty (30) days from the specified date, all stocks covered by the subscription thereupon become delinquent and subject to sale, unless the board of directors orders otherwise¹.

Regarding corporate dividends and remedies concerning unpaid subscriptions, the law provides the following rules:

• Application of Dividends: Any cash dividends due on delinquent stock shall first be applied to the unpaid balance on the subscription plus costs and expenses, while stock dividends shall be withheld from the stockholder until the unpaid subscription is fully paid².
• Corporate Acquisition in Delinquency Sale: Provided that the corporation has unrestricted retained earnings in its books to cover the shares, it has the power to purchase or acquire its own shares to collect or compromise an indebtedness arising out of an unpaid subscription in a delinquency sale, and to purchase delinquent shares sold during said sale³.