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Authorized stock is the maximum number of shares that a corporation is allowed to issue. The number of authorized shares is stated in the entity's articles of incorporation or charter. The initial amount of authorized stock is set when the corporation is initially formed.
Authorized share capital?also known as "authorized stock," "authorized shares," or "authorized capital stock"?refers to the maximum number of shares a company is legally allowed to issue or offer based on its corporate charter.
The number of authorized shares is specified in the company's articles of incorporation.
Articles of Incorporation must be amended to alert the state to major changes. Changes that qualify for state notification include changes to: address. company name.
Key Takeaways Authorized shares are the maximum number of shares a company is allowed to issue to investors as laid out in its articles of incorporation. Outstanding shares are the actual shares issued or sold to investors from the available number of authorized shares.
Yes, a company can change the number of authorized shares it is allowed to issue. Public companies must often notify existing shareholders and call for a shareholder vote. The measure is then often reviewed at the following shareholder meeting.
The number of authorized shares can be increased by the shareholders of the company at annual shareholder meetings, provided a majority of the current shareholders vote for the change.
Key Takeaways Authorized stock refers to the maximum number of shares a publicly-traded company can issue, as specified in its articles of incorporation or charter. Those shares which have already been issued to the public, known as outstanding shares, make up some portion of a company's authorized stock.