How Do You Spell AUTHORIZED CAPITAL STOCKS?
Pronunciation: [ˈɔːθəɹˌa͡ɪzd kˈapɪtə͡l stˈɒks] (IPA) 
Pronunciation: [ˈɔːθəɹˌa͡ɪzd kˈapɪtə͡l stˈɒks] (IPA)
Authorized capital stock refers to the total amount and types of shares that a company can issue to raise funds from investors. It represents the maximum value of the securities that a corporation is legally allowed to offer to the public or its shareholders.
The term "authorized" implies that the amount of capital stock has been approved and specified in the company's legal documentation, including its articles of incorporation or its memorandum of association. This maximum limit is set by the company's board of directors and is typically established at the time of its formation or through subsequent amendments with approval from the shareholders.
Authorized capital stock is divided into shares, which represent ownership units in the company. The specific types of authorized shares, such as common stock or preferred stock, may vary depending on the company's structure and requirements. Each share carries certain rights and privileges, such as voting rights, dividend entitlements, and priority in case of liquidation.
It is important to note that the authorized capital stock does not necessarily represent the total number of shares that have been issued by the company. The actual number of shares issued may be lower than the authorized limit, and any further issuance of shares beyond the authorized capital stock must be approved by the shareholders through specific procedures, such as amending the articles of incorporation or obtaining a shareholder resolution.
