Define: Authorized Shares

Authorized shares refer to the maximum number of shares that a corporation is allowed to issue as stated in its articles of incorporation.

The number of authorized shares is typically determined by the corporation’s founders or initial shareholders when incorporating the company. This number can be adjusted through a vote by the shareholders.

No, a corporation cannot issue more shares than its authorized amount without first amending its articles of incorporation to increase the authorized share capital.

If a corporation exceeds its authorized share limit, it may face legal consequences, such as fines or penalties. Additionally, any shares issued beyond the authorized limit may be considered invalid or void.

Yes, the number of authorized shares can be decreased through a vote by the shareholders and by amending the articles of incorporation. This may be done to reflect changes in the company’s capital structure or to prevent dilution of existing shareholders’ ownership.

Authorized shares can be sold to the public through an initial public offering (IPO) or subsequent public offerings. However, the number of shares offered to the public cannot exceed the authorized share limit.

Yes, authorized shares can be transferred or sold between shareholders, subject to any restrictions or requirements outlined in the corporation’s bylaws or shareholder agreements.

Yes, the authorized share limit can be increased after the initial incorporation through a vote by the shareholders and by amending the articles of incorporation. This may be necessary if the company plans to raise additional capital or issue more shares.

No, authorized shares are the maximum number of shares a corporation can issue, while issued shares are the actual shares that have been issued to shareholders.

No, changing the authorized share limit typically requires approval from the shareholders through a vote. This is usually done during a shareholders’ meeting or through written consent.