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Table A, Article 11 - Companys lien: It arises from the companys article and provides limited security in the event

ent of a member being indebted to the company. It is a form of charge recognized by the court of equity. The directors may declare any shares to be wholly or partly exempt from this article. It also extends to all dividends payable on the shares. Therefore where a shareholder failed to pay a call in respect of partly paid shares and the company pays a dividend on those shares, the company may use the dividend to offset the amount due on the call.

Table A, Article 12 - Enforcement of the lien If a shareholder receives a demand from the company for payment of a sum due and the company has a lien on that share, failure to pay within 14 days will enable the company to sell that share. In the absence of an express power of sale in the articles, the company may apply to the court for an order of sale.

Priority of lien: A lien gives company an equitable interest in the shares. It attaches to the shares from the moment they are issued but if the company receives notice of other equitable interest in the shares before the lien takes effect, the company cannot claim priority for its lien.