Q&As
Where there is no lien provision in the articles of association of a private company limited by shares, what steps can be taken by the company to recover any amounts outstanding on its issued shares?
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Published on: 13 June 2017
On becoming a member of a Company, a person becomes liable to contribute to the company's assets to the extent and in the manner prescribed by the Companies Act 2006 (CA 2006), the general law and the company's Articles of association. In the case of a company limited by shares, each member is liable to pay only the nominal value of the shares held by him (together with any premium which they may have agreed to pay) (Insolvency Act 1986, s 74(2)(d) (IA 1986); CA 2006, s 3(2)). In addition, notwithstanding any provision of a company's articles, no member is bound by any amendment to the articles that requires them to subscribe for more shares than they then hold or in any way increases their liability to pay money to the company unless they have consented to that amendment in writing (CA 2006, s 25).
Until a liquidation
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Articles of association definition
What does Articles of association mean?
The principal constitutional document of a company, dealing with management and administration issues, most notably powers of directors, transfer and issue of shares, and board and member meetings. The articles form the fundamental contract between the company and the shareholders and must be available for public inspection at Companies House.
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