What are Issued Shares?
Issued shares are easily confused with authorized shares. Authorized shares is the maximum number of shares that the board of directors is “authorized”, or allowed to issue. Issued shares, however, is the number of shares actually “issued”, or given out to shareholders. Only issued shares are counted for ownership purposes.
Issued shares are the authorized shares that have actually been issued to shareholders. The total number of shares that have been distributed at a given time are the shares that comprise the entire pie of ownership. Shares that are authorized and un-issued are not taken into account when determining what percentage of ownership a given shareholder has. However, a shareholder’s percentage of ownership is subject to dilution if the Board decides it is appropriate to issue more of the authorized shares.
Issued shares are the authorized shares that have actually been issued or sold to shareholders. Un-issued shares do not represent an equity holding in the corporation. A shareholder’s equity will be determined based on the total number of issued shares and will not include the remaining authorized but un-issued shares. Note also that a corporation may own or purchase its own shares but that this is different from un-issued shares.
