Definition

Noun (used in plural form: authorized shares) The maximum number of shares of stock that a corporation is legally permitted to issue, as specified in its foundational corporate document (the articles of incorporation or charter). This number represents a cap set by the company's founders or board of directors and can only be increased with shareholder approval.

Usage

This term is used in corporate finance, legal, and investment contexts to discuss a company's capital structure. * The term is almost always used in its plural form, "authorized shares." * It is a countable noun. You can refer to "the number of authorized shares" or "10 million authorized shares." * It is a formal, technical term.

Examples

• Corporate Planning: "The company's articles of incorporation specify 50 million authorized shares."
• Financial Reporting: "As of the end of the fiscal year, only 30 million of the 100 million authorized shares had been issued."
• Investment Analysis: "Before investing, check if the company has a large pool of unissued authorized shares, as this could lead to dilution."

Advanced Usage

• Contrast with Issued Shares: A key distinction in corporate finance is between (the maximum allowed) and (the number actually sold or allocated to shareholders). The difference is the .
• Contrast with Outstanding Shares: are a subset of issued shares, representing those currently held by all shareholders, excluding treasury stock (shares repurchased by the company).

Variants and Related Words

• Authorized Stock: A synonymous term, often used interchangeably with "authorized shares."
• Authorized Capital or Authorized Share Capital: Refers to the total monetary value calculated by multiplying the number of authorized shares by their par value (if any).
• Issued Shares (n.): The number of shares that have been allocated and sold to shareholders.
• Outstanding Shares (n.): The number of issued shares currently held by all investors.

Synonyms

• Authorized stock
• Authorized capital stock

Related Phrases

• To increase authorized shares: The corporate action of amending the charter to raise the maximum number of issuable shares, requiring shareholder vote.
  • Example: "The board proposed to increase the authorized shares to facilitate a future acquisition."
• Pool of authorized shares: Refers to the total available amount.
  • Example: "The company has a large pool of authorized shares remaining for employee stock options."

Noun

1. the maximum number of shares authorized under the terms of a corporation's articles of incorporation