What are the two major issues regarding payment for shares?

Answer 1

Two major issues arise regarding payment for shares. First, what type of consideration may the corporation validly accept in payment for the shares and, second, who shall determine the value to be placed upon the consideration the corporation receives in payment for shares. The Revised Act greatly liberalized the rules for type of consideration by specifically validating for the issuance of shares consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, services performed, contracts for future services, and promissory notes. Determining the value to be placed on the consideration that stock purchasers will exchange for shares is the responsibility of the directors. However, under the Revised Act, the articles of incorporation may reserve to the shareholders the powers granted to the board regarding the issuance of shares.