Companies Act 2014 section 81

Forfeiture of shares

Section 81 sets out the rules and procedures by which a company may forfeit a member's shares when that member fails to pay a call or instalment on shares by the due date.

• Directors may serve a notice on a member who fails to pay a call or instalment, requiring payment of the outstanding amount plus any accrued interest within at least 14 days
• If the member does not comply with the notice, the directors may pass a resolution to forfeit the shares, and may then sell or otherwise dispose of them on whatever terms they see fit
• A person whose shares are forfeited loses membership of the company in respect of those shares but remains liable for all amounts that were due at the date of forfeiture until paid in full
• A buyer of forfeited shares is registered as the new holder and their title is not affected by any irregularity in the forfeiture or disposal process