| Commentary

196 Forfeiture, surrender and cancellation of shares

| Commentary

196 Forfeiture, surrender and cancellation of shares

The Companies Act 2006 expressly preserves the right of a company to forfeit shares for a shareholder’s failure to pay sums due in respect of the shares (or accepting shares surrendered in lieu) provided that this is permitted by the company’s articles1. The model articles for public companies give the directors of the company power to issue a notice of intended forfeiture to a shareholder who fails to pay a call on his shares and to forfeit the relevant shares if the notice is not complied with by the specified deadline2.

The public company

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