Authorized Stock
Definition:
Authorized stock refers to the maximum number of shares that a corporation is allowed to issue to its shareholders, as stated in its official documents known as the articles of incorporation. This number is set when the company is created and can be changed later with the approval of the shareholders.
Usage Instructions:
- When discussing a corporation's financial structure, you can use "authorized stock" to refer to the total potential shares the company can offer. - It is important to note that just because a company has authorized a certain number of shares does not mean they have issued or sold all of them.
Example:
"The company has authorized 1 million shares of stock, but to date, it has only issued 600,000 shares to investors."
Advanced Usage:
In more complex financial discussions, you might encounter terms like "overriding authorized stock" or "revising authorized stock limits," which deal with adjusting the number of shares a company can issue based on strategic needs or market conditions.
Word Variants:
- Authorized Shares: Another way to refer to the same concept. - Unissued Stock: Shares that are authorized but have not yet been issued to investors.
Different Meaning:
While "authorized stock" specifically refers to shares in a corporation, the word "authorized" on its own can mean having official permission or approval in various contexts (e.g., "an authorized dealer" means a dealer who has permission to sell certain products).
Synonyms:
- Permitted shares - Approved shares
Idioms and Phrasal Verbs:
While there are no specific idioms or phrasal verbs directly related to "authorized stock," you might encounter phrases like "to issue stock," which means to sell shares to investors or the public, or "to raise capital," which refers to obtaining funds for the company, often through the sale of authorized stock.