Section 85: Privilege or lien on shares

85. Privilege or lien on shares (1) Notwithstanding any other enactment, a company shall, where the constitution so provides, be entitled to a privilege or lien, independently of and without the necessity for inscription, in priority to any other claim, over every issued share, not being a fully paid share, and over any dividend payable on the share, for all money due by the holder of that share to the company whether by way of money called or payable at a fixed time in respect of that share. (2) In the case of a company, other than a public company, the constitution may provide for a privilege or lien of the same kind as referred to in subsection (1) over fully paid shares and dividends on those shares for all money owing by the shareholders to the company. (3) Subject to subsection (4), a company may, in such manner as the directors think fit, sell any share on which the company has a privilege or lien. (4) No sale shall be made unless— (a) a sum in respect of which the lien exists is presently payable; and (b) until the expiry of 14 days after a written notice, stating and demanding payment of such part of the amount in respect of which the privilege or lien exists as is presently payable, has been given to the registered holder for the time being of the share, or the person entitled to the share by reason of the death or bankruptcy of the registered holder. (5) The directors may, to give effect to any sale under subsection (3), authorise some person to transfer the shares sold to the purchaser of the shares. (6) The purchaser referred to in subsection (5) shall be registered as the holder of the share comprised in any such transfer, and shall not be bound to see to the application of the purchase money, nor shall the title of the purchaser to the share be affected by any irregularity or invalidity in the proceedings relating to the sale. (7) The proceeds of the sale shall be received by the company and applied for the payment of such part of the amount in respect of which the lien exists as is presently payable, and any residue shall, subject to a like lien for sums not presently payable as existed upon the share before the sale, be paid to the person entitled to the share at the date of the sale. (8) The directors may, where the constitution so provides, decline to register the transfer of a share on which the company has a lien.