Lien, Surrender, and Forfeiture of Shares
The terms Lien of shares, Surrender of shares & Forfeiture of shares are explained in detail as follows :
Lien of shares :
A lien is the right to retain possession of a thing until a claim is satisfied. In the case of a company lien on a share means that the member would not be permitted to transfer his shares unless he pays his debt to the company. The articles generally provide that the company shall have a first lien on the shares of each member for his debts and liabilities to the company. The right of lien is not inherent but must be clearly provided for in the articles. The articles may give the right of lien over share either for unpaid calls or for any other debt due by the member of the company. The company may have lien on fully paid-up shares. The lien also extends to the dividends payable on the shares.
The death of a shareholder does not destroy the lien. The right of lien can be exercised even through the claim has become barred by law of limitation. Where the liability of the shareholder towards the company is disputed by him, it does not deprive the company of its right of lien on the shares. But a company will not be able to exercise its right of lien where the shareholder has mortgaged his shares before he has incurred any liability to the company and the company has notice of it. Similarly, a company will loose its lien if registers a transfer of shares subject to the lien.
In law, a lien (UK /ˈliːən/ or US /ˈliːn/) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the lienor and the person who has the benefit of the lien is referred to as the lienee.
The etymological root is Anglo-French lien, loyen "bond", "restraint", from Latin ligamen, from ligare "to bind".
In the United States, the term lien generally refers to a wide range of encumbrances and would include other forms of
Lien of shares :
A lien is the right to retain possession of a thing until a claim is satisfied. In the case of a company lien on a share means that the member would not be permitted to transfer his shares unless he pays his debt to the company. The articles generally provide that the company shall have a first lien on the shares of each member for his debts and liabilities to the company. The right of lien is not inherent but must be clearly provided for in the articles. The articles may give the right of lien over share either for unpaid calls or for any other debt due by the member of the company. The company may have lien on fully paid-up shares. The lien also extends to the dividends payable on the shares.
The death of a shareholder does not destroy the lien. The right of lien can be exercised even through the claim has become barred by law of limitation. Where the liability of the shareholder towards the company is disputed by him, it does not deprive the company of its right of lien on the shares. But a company will not be able to exercise its right of lien where the shareholder has mortgaged his shares before he has incurred any liability to the company and the company has notice of it. Similarly, a company will loose its lien if registers a transfer of shares subject to the lien.
In law, a lien (UK /ˈliːən/ or US /ˈliːn/) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the lienor and the person who has the benefit of the lien is referred to as the lienee.
The etymological root is Anglo-French lien, loyen "bond", "restraint", from Latin ligamen, from ligare "to bind".
In the United States, the term lien generally refers to a wide range of encumbrances and would include other forms of