shares

Karina,

If loan is taken by giving shares of company as a security, from bank or from any financial institution and the borrower didn't repay the loan as per repayment schedule & as per terms & conditions,

then the lender can excercise his Right of Lien after proper notice & legal formalities.

Hope u get the point.

There is a difference between Lien of Shares and Forfeiture of shares

Forfeiture of shares:

When any company allots share to the applicants, it is done on the basis of a legal contract between the company and the applicant, which makes it binding upon the shareholders to pay the amount of allotment and calls whenever they are due. Now if any shareholder fails to pay the allotment and or call money due to him, the shareholder violates the contract and the company is entitled to take its share back, which is known as forfeiture of shares. The company can forfeit such shares if authorised by the Articles of Association. Forfeiture of share can be done according to the rules laid sown in the Articles and if no rules are given in Articles, the provisions of Table A, regarding forfeiture will apply. Forfeiture of shares means cancellation of
allotment to defaulting shareholders and to treat the amount already received on such shares is not returnable to him – it is forfeited.