Carry a preincorporation stock subscription into the company's formation record

Before a Delaware corporation is formed, founders may collect promises to purchase shares. Obtain the complete subscription document, attachments and signatures, along with any amendments or related correspondence. Keep informal discussions and unsigned drafts separate from the agreement counsel determines is operative.

Section 166 requires a stock subscription to be written and signed by the subscriber or the subscriber's agent to be enforceable against that subscriber. Ask counsel to assess the actual document and signing authority. An amount in a fundraising spreadsheet should not be treated as the complete legal evidence of a subscription.

Identify the proposed corporation, share class, number of shares, consideration, conditions and performance dates in the agreement. Record whether formation, another subscriber's participation or a specified event affects the commitment. Preserve the original terms before asking anyone to change them.

Under section 165, a preincorporation subscription is generally irrevocable for six months unless its terms provide otherwise or the specified consent is obtained. Have counsel interpret the agreement and any withdrawal request. Do not promise that a subscriber can cancel immediately, or that the company can compel performance, without the applicable legal review.

Give the formation lawyer a schedule of all identified subscriptions and their supporting documents. Compare the promised share classes and quantities with the proposed authorized capital. Flag inconsistent rights, multiple promises covering the same allocation or a subscriber whose commitment uses a different proposed company name.

Resolve those issues before the formation documents and issuance approvals are finalized. A revised capitalization plan should not silently rewrite a signed subscription. If counsel prepares an amendment or release, preserve who agreed, what changed and when, with the required consent evidence.

Once the corporation exists, follow counsel's instructions for the appropriate board action, subscription performance and share issuance. Confirm that the approved issuance is supported by the operative agreement and the required consideration evidence. Keep a commitment awaiting performance distinct from stock that has actually been issued.

Use a completion schedule for each subscriber showing the governing agreement, satisfied conditions, required payment or other performance, approval and issuance record. Finance should receive the legally approved facts for its separate accounting responsibilities. Do not infer the legal issuance date merely from when a deposit reached an account.

Archive the subscription, amendments, company approvals and resulting stock-ledger entries together. Keep canceled, disputed and unperformed subscriptions on a separate exceptions list until counsel resolves them. Their history can matter even when they do not appear in the current outstanding-share total.

Give the corporate custodian the completed schedule and the owner of each outstanding issue. The formation record should explain which preformation promises became issued stock, which remain conditional and which ended through a documented legal step, without treating every fundraising conversation as ownership.