How Do You Spell AUTHORIZED CAPITAL STOCK?
Pronunciation: [ˈɔːθəɹˌa͡ɪzd kˈapɪtə͡l stˈɒk] (IPA) 
Pronunciation: [ˈɔːθəɹˌa͡ɪzd kˈapɪtə͡l stˈɒk] (IPA)
Authorized capital stock refers to the total number of shares of a company's stock that a corporation is legally permitted to issue and sell as stated in its articles of incorporation or similar governing document. It represents the maximum amount of capital that a company can raise through the issuance of its shares.
The authorized capital stock is typically divided into individual units called shares, and each share represents a proportional ownership interest in the company. These shares can be sold to investors or used by the company for various purposes such as raising funds, acquiring assets, or compensating employees.
The authorized capital stock does not necessarily indicate the actual number of shares that have been issued or outstanding. It serves as a limit or ceiling on the company's stock issuance, and any increase in the number of shares requires approval from the company's shareholders or relevant regulatory authorities.
By having authorized capital stock, a company has flexibility in managing its stock issuance within the authorized limit. This provides the company with the ability to respond to changing financial needs or potential investment opportunities in the future.
It is important to note that authorized capital stock is different from issued or outstanding capital stock. The former represents what a company could potentially issue, while the latter refers to the shares that have already been issued and are currently held by shareholders.
