Question

Which is the best description of authorized shares?

Answer 1

Answer:

Authorized shares are the number of shares that a corporation is legally allowed to issue, while outstanding shares have already been issued. ... The number of authorized shares is initially set in a company's articles of incorporation.

Answer 2

Best description of authorized shares

Explanation:

• Authorized Share or authorized share capital or Nominal capital is the maximum amount of share that can be issued by a company to raise fund from the market.
• The concept of authorized capital helps in putting a limit on the issue of new shares which may alter the control of the company and affect the profit distribution ration.
• The amount of authorized capital should be mentioned in the Memorandum of association of the company.
• It shows the  total face value of company's share to be issued in future.

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Equity share capital meaning, advantage and disadvantage

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