Can you explain the difference between authorized shares and issued shares? – watch video

Can you explain the difference between authorized shares and issued shares?

The Articles of Incorporation designate the maximum number of shares that a corporation can sell to its investors.  When it actually sells the shares to the investors, those are called the issued shares.  It’s always advisable to have a greater number of authorized shares than issued shares, because it avoids the need to later amend the Articles if you want to engage in a key transaction (e.g., issuing shares to a valued employee).