A lien means entitlement or legal right acquired in one's property by a creditor for failure to pay debt by the debtor. A lien is active until all the duties and obligations are executed as expected to the creditor and he is contented. If the underlying burden is not satisfied, the creditor may be able to take possession of the property involved and sell it if he wishes.

Whereas forfeiture means the shareholder ceases to be a member of the company. He loses all his rights and interests that a shareholder might enjoy because he no longer owes any remaining balance and surrenders any potential capital gain on the shares, which automatically revert back to the ownership of the issuing company.

Differences between lien on shares and forfeiture of shares include but are not limited to:

• A lien on shares prevents the shareholder from transferring his shares unless he pays the debt that the Company owes him. Whereas a forfeiture of shares means to expropriate/ take away shares from a shareholder by penalizing him for default of payment in calls.
• A lien is exercised on non-payment of debt and other liabilities while a forfeiture is exercised on failure to make payments on calls. This means that liens are general while forfeitures are more specific.
• If the shares held under lien are sold and a surplus is acquired, the surplus is given to the shareholder after deducting the amount due to the Company, but for re-issued forfeited shares, the Company retains the surplus.
• Lien on shares does not re-structure the share capital by increasing nor reducing it, whereas a forfeiture results to reduction in share capital if the shares are not re-issued.
• Shares acquired through lien can only be sold, whereas forfeited shares can either be re-issued or cancelled.