This is the loss of any property without any compensation due to defaulting or breaking any obligations written on the contract, or as a penalty for illegal conduct. According to the terms of the contract, forfeiture can mean requiring the defaulting party to give up ownership of an asset or the cash flows from an asset as a means of compensating for the losses to the other party. In terms of shares, any share forfeitures result to the returning of the shares to the issuer.

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