OTHER MATTERS RELATING TO SHARES 93
Where Table A, cl. 16, applies, or similar provision is made
in special articles, calls may be paid in advance, and the
company may pay interest on moneys so prepaid, even though
it is earning no profits, and the payment has to be made out
of capital [Lock v. Queensland Mortgage Co. (1896), A.C. 461].
But money paid in advance of calls is capital paid up, and
not an ordinary loan, so that it cannot be repaid except on
a legal reduction of capital [London & Northern Steamship
v. Farmer (1914), 111 L.T. 204]. The power to accept from
a member the whole or any part of the amount remaining
unpaid on any shares held by him, although no part of that
amount has been called up, is conferred by s. 48 of the Act
upon companies which are so authorised by their articles
Hence the above-mentioned provision in many articles.

Under the articles of association of most companies a lien is Lien.
given to the company on the shares (or more generally upon
the shares not fully paid) of the members in respect of any
debts for the time being due from them to the company,
e.g. in the case of partly paid shares, for calls. If the original
articles do not so provide they may be altered by special
resolution, or if under the original articles the lien only
applies to partly paid shares, it may be extended by special
resolution to fully paid shares [Allen v. Gold Reefs of West
Africa (1900), 1 Ch. 656]. If such a lien exists no transfer
of the shares belonging to a member who is indebted to the
company should be sanctioned by the directors until the
debt 1s discharged. The Committee of the Stock Exchange,
however, require the articles to provide that fully paid
shares shall not be subject to a lien.

The articles of most companies authorise the forfeiture of Forfeiture.
shares in the event of failure on the part of a member to pay
any call or instalment on or before the day appointed for the
payment thereof (see e.g. Table A, cl. 23-29). The pro-
visions of the articles as to forfeiture must be very carefully
studied and scrupulously observed, for the right of forfeiture
is very strictly construed by the Courts, and any irregularity
in or deviation from the powers given to the directors by the
articles will render the forfeiture bad. Where the articles
give no power of forfeiture, the sanction of the Court must be
obtained to make it valid [Clarke v. Hart (1858), ., li.L.C.
633].

A power to forfeit for non-payment of debts generally as
distinct from calls or instalments is invalid, as the exercise
of such a power would amount to an illegal reduction of
capital [Hopkinson v. Mortimer Harley & Co. (1917), 1 Ch.
6761.