Capital stock is the number of common and preferred shares that a company is authorized to issue, and is recorded in shareholders' equity. What is capital stock?Capital stock is the total amount of shares a company is authorized to issue, while treasury stock is the number of shares a company holds in its treasury. This form is for general instructions that apply to all corporation tax forms. It includes a variety of topics about how to fill out your form. Capital stock, also known as authorized stock, refers to all common stock and preferred stock a corporation is legally allowed to issue.