: The legal limit set by the corporate charter.
: The subset of issued shares currently held by investors, excluding any shares repurchased by the company (treasury stock). authorized shares
Issuing shares beyond the authorized limit is a severe breach of corporate law, often rendering such transactions invalid and exposing leadership to significant legal risk. : The legal limit set by the corporate charter
Authorized shares define the total "inventory" of equity a company can ever distribute throughout its existence. It is essential to distinguish them from and outstanding shares : authorized shares
The primary reason companies authorize significantly more shares than they initially issue is . A reserve of unissued authorized shares allows a company to: The Power to Issue Stock - Wake Forest Law Review