Authorized shares, also known as authorized stock, are the maximum number of shares a company is legally allowed to sell. The number is determined at the time the company is created, and can only be increased or decreased by a vote of current shareholders.
Authorized stock includes common shares and preferred shares, and the company may hold back some of the total authorized shares, so that it can sell them to make money if needed in the future, without getting a shareholder vote. Knowing the number of authorized shares your company has, as compared to the number of issued shares, would indicate the potential for share dilution.
Recent Mentions on Fool.com
- Boeing's Q3 Earnings Preview: 4 Key Things You Want to Know
- Discover Financial Services Earnings: Record Rapid Growth Continues
- 2 Things Altria Group Dividend Investors Need to Know
- Apple, Inc. Reports a Blowout Quarter -- and Is Expecting Another One
- 5 Things Goldman Sachs' Management Wants You To Know
- How Big Will The Harry Potter Fantastic Beasts Spinoffs Be For Warner Bros?