How Many Shares of Stock Are Required To Be A Corporation?

A corporation can't be a corporation without at least one share of stock. So you must have at least one shareholder, and one share of stock. You can have (authorize) as many shares of stock as you want, however, this may increase your filing fees in some cases.

What's the Difference Between Issued and Authorized Shares?


The board of directors control the issuance of stock. Authorized shares is the total number of shares of stock that the board of directors are "authorized" to issue to shareholders. The board may issue all the shares now, or issue some now, and some later. Authorized shares become issued shares when "issued" or distributed to a stockholder. Shares that are not issued are usually called authorized but UN-issued shares. UN-issued shares belong to the corporation and are not considered for shareholders' ownership percentages.

What Are Authorized Shares?

State law specifies that shares of stock in the corporation will be issued under the direction of the board of directors. But, since the corporation is set up to benefit the shareholders, the shareholders set, or limit, the number of shares the directors are "authorized", or allowed, to issue. Since the directors are not allowed to issue shares without authorization from the shareholders, the number of authorized shares is equal to the number of total shares.

Stock Certificates

Stock certificates are generally divided into two forms: registered stock certificates and bearer stock certificates. A registered stock certificate is normally only evidence of title, and a record of the true holders of the shares will appear in the stockholder's register of the corporation. A bearer stock certificate, as its name implies is a bearer instrument, and physical possession of the certificate entitles the holder to exercise all legal rights associated with the stock. Bearer stock certificates are becoming uncommon: they were popular in offshore jurisdictions for their perceived confidentiality, and as a useful way to transfer beneficial title to assets (held by the corporation) without payment of stamp duty. International initiatives have curbed the use of bearer stock certificates in offshore jurisdictions, and tend to be available only in onshore financial centres, although they are rarely seen in practice.

Authorized Shares What Are They?


Authorized shares are the number of shares that the charter allows the corporation to issue. If there is more than one class of shares, there must be a prescribed number for each class and the limitations of each class must be specified.

What Is The Difference Between Issued And Authorized Shares?

Authorized shares are the total number of shares that the board of directors may issue. Issued shares are the shares that have been distributed to shareholder(s).

How Many Shares Of Stock And Stockholders Are Required?

One share of stock and one shareholder are the minimum requirements. There is no limit on the maximum number of shares or shareholders.

What Are Stockholders OR Shareholders?

The term stockholders and shareholders are usually used interchangeably, and are the people for whom the corporation was organized. In large corporations, shareholders are merely investors who put money into the business in return for future dividends. In a small corporation, they are the people who actually start and run the corporation providing jobs for themselves.

Authorized Shares of Stock / Stock Certificates

The maximum number of shares a company is allowed to issue. Generally, the company's charter specifies the number of authorized shares, but shareholders can increase or decrease it according to procedures listed in the charter. Typically, the number of authorized shares is larger than the required amount in order to give a company the greatest amount of flexibility. Authorized shares are also called authorized capital stock or simply authorized stock.