Definition of Authorized Stock

Authorized Stock is the maximum number of shares that a corporation can sell in an effort to raise capital. The number of authorized shares may only be changed by a vote of the shareholders.

Applying "Authorized Stock" to Securities Exams:

A corporation must state at the time of incorporation the maximum number of shares that the corporation may sell to investors. This is known as the authorized stock. The number of authorized shares are arbitrarily determined and can only be changed by a vote of the stockholders.

Preparing for an Exam?

Receive 15% off all your Securities Exam Prep materials

Please wait....