"Authorized shares" refers to the number of shares the corporation is allowed to issue under its certificate or articles of incorporation. Authorized stock is the maximum number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation.This somewhat complicated annual franchise tax can be calculated two different ways: the Authorized Shares Method and the Assumed Par Value Capital Method. Outstanding shares refer to the number of stocks that a company has issued. Authorized shares become issued shares when "issued" or distributed to a stockholder.