Illinois Statutes Chapter 215. Insurance § 5/23. Deposit of proceeds of shares--When subscribers deemed shareholders

§ 23. Deposit of proceeds of shares--When subscribers deemed shareholders.

(1) The cash or securities received by the Company upon subscriptions for shares shall be placed in the bank or trust company designated in the escrow and subscription agreements. No part of the cash or securities so deposited shall be used by the company prior to the issuance to it of a certificate of authority to transact business, except when payments for all the shares to be issued and sold, as set forth in the articles of incorporation, are completed, for the purpose of making the deposit as provided for in section 26.

(2) Any officer, director or incorporator of a company who, prior to the issuance of the certificate of authority to the Company, withdraws, causes to be withdrawn or knowingly permits the withdrawal of any cash or securities on deposit in such bank or trust company, for any purposes other than those authorized in subsection (1), shall be guilty of a Class A misdemeanor.

(3) The subscribers shall be deemed to be shareholders when full payment upon the subscriptions for all shares which the company proposes to issue and sell, as set forth in the articles of incorporation, shall have been received by the company, but no certificate for shares may be issued by the company prior to the issuance to it of a certificate of authority to transact business.

(4) In the event that payments for all shares to be issued and sold by the company, as set forth in the articles of incorporation, are not completed within the time provided in the permit of the Director authorizing the solicitation of subscriptions the cash and securities received in payment shall be returned to the subscribers who have made the payments.