Section 164 CAMA 2020
Section 164 Companies and Allied Matters Act is about Lien on shares. It is under Call on and Payment for Shares of Chapter 8 of PART B (Incorporation of Companies and Incidental Matters) of the Act.
Lien on shares
(1) A company has a first and paramount lien on every share, (not being a fully paid share) for all money (whether currently payable or not) called or payable at a fixed time in respect of that share, and the company also has a first and paramount lien on all shares (other than fully paid shares) standing registered in the name of a single person for all money presently payable by him or his estate to the company, but the directors may at any time declare any share to be wholly or in part exempt from the provisions of this subsection.
(2) A company’s lien, if any, on a share shall extend to all dividends payable on, and any bonus shares issued in relation to such share.
(3) A company may sell, in such manner as the directors think fit, any share on which the company has a lien, but no sale shall be made unless a sum in respect of which the lien exists is currently payable, nor until the expiration of 14 days after a notice in writing, demanding payment of such part of the amount in respect of which the lien exists as is currently payable, has been given to the registered holder of the shares, or the person entitled to them by reason of his death or bankruptcy.
(4) For the purpose of giving effect to any such sale, the directors may authorise a person to transfer the shares sold to the purchaser of the shares and the purchaser shall be registered as the holder of the shares comprised in any such transfer.
(5) The purchaser is not bound to see to the application of the purchase money and his title to the shares is not affected by any irregularity or invalidity in the proceedings in reference to the sale.
(6) The proceeds of the sale of any share pursuant to this section shall be received by the company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue, if any, shall (subject to a like lien for sums not presently payable as existed upon the shares before the sale) be paid to the person entitled to the shares at the date of the sale.