Authorized stock is the maximum number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation. Capital stock is the number of common and preferred shares that a company is authorized to issue, and is recorded in shareholders' equity.Capital stock, also known as authorized stock, refers to all common stock and preferred stock a corporation is legally allowed to issue. Capital stock authorized is the number of shares of stock that a corporation is entitled to issue as designated in its charter. Authorized stock refers to the maximum number of shares a company is legally permitted to issue, as outlined in its corporate charter. "Authorized shares" refers to the number of shares the corporation is allowed to issue under its certificate or articles of incorporation. Authorized shares become issued shares when "issued" or distributed to a stockholder. Corporations with 5,000 or less authorized shares are considered minimum stock and will pay the minimum Delaware Franchise Tax each year. The product of the number of authorized shares and the face value per share is referred to as the authorized share capital. Every state will require that you indicate how many shares of stock the corporation will be authorized to issue.