FORFEITURE AND SURRENDER OF SHARES
Keywords: Company Law
AbstractForfeiture and surrender of shares are discrete concepts that produce entirely different results. In forfeiture, the company initiates the proceedings. In surrender, it is the shareholder who is the initiator. There is little doubt that a company has no inherent authority to forfeit shares of a delinquent shareholder. When it does have the power the company must derive it directly from statute or the instrument creating it or its regulations. Both the Dominion and the Ontario companies acts make provision for forfeiture of shares for non-payment of calls. But on the matter of surrender there is less certainty whence the power to accept a surrender is derived. The powers are not statutory, not even in the English companies acts. The cases seem clear, however, that a company may by special resolution give itself power to accept surrenders. Though this power may exist, the law provides certain very definite limitations upon its exercise.
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