Delinquent stocks pertain to those stocks where the shareholder defaulted in the payment of his subscription within the grace period specified in the contract of subscription. You can learn a lot about them from finance books, but I’ll try to give you a rundown now. But before the delinquent stocks resold to someone else, there are procedures which should be followed for the protection of the stockholder. Hence, part of this procedure should be a resolution declaring unpaid subscriptions payable, issuance of notice of the resolution to the stockholder concerned, a separate resolution ordering the sale of delinquent stocks. There must also notice and publication of delinquent sale and the actual selling of delinquent stocks in a public auction.

In the absence of bidders, the corporation is allowed to purchase for itself the delinquent stock. But this can only be done legally if the corporation has net earnings or else this shall be a violation of the trust fund doctrine.

Why not forfeit the delinquent stock instead of purchasing it by the corporation itself? Stocks come with a price. Otherwise, this will be tantamount to watering stocks and which would prejudice creditors as well as other stockholders.