Authorized Capital

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Related to authorized shares: authorized capital, Outstanding shares, Issued shares

Authorized Capital


the amount of capital specified in the charter or other agreement governing the establishment of capitalist enterprises, joint-stock companies, and various business associations as necessary to start up operations. The capital is raised through government appropriations, stock sales, and individual contributions (the last being extremely rare today). Authorized stock is also referred to as basic capital and share capital. In some countries (France, Federal Republic of Germany), enterprises and associations can be registered only if the amount of authorized capital conforms to certain legal requirements. In the USA and Great Britain, there are no such requirements.

The amount of authorized capital is much less than the amount of capital obtained through credits, investments, and bonds. Together with reserve capital, authorized capital constitutes the assets of an enterprise. Since the ratio of the authorized capital to the overall volume of economic activity is used in evaluating financial soundness, current high rates of inflation have led capitalist enterprises and banks to regularly increase the authorized capital by placing additional stock on the market.


References in periodicals archive ?
In the meantime, the board is exploring possible alternatives specific to the over-issuance, including without limitation, increasing the number of authorized shares and/or a reverse split, any of which would require a majority vote of the shareholders.
The company had previously increased its authorized shares to 500 Million in anticipation of certain pending acquisitions that may have required issuance of stock, after the negotiations of these acquisitions the stock will not be required as the acquisitions will be funded from cash flow.
If the increase in authorized shares is approved at the special meeting, the stock split will be effected on January 22, 2007, to shareholders of record on January 10, 2007.
Gelman Sciences Board of Directors believes that the proposed increase in the number of authorized shares of stock also will provide appropriate flexibility for the Company to take advantage of future opportunities, including acquisitions, financing, business combinations, and other corporate needs, including further stock splits and dividends.
Despite the approval by shareholders to increase the company's authorized share capital, Xechem's board of directors held a special meeting immediately following the conclusion of the Annual Meeting and passed a resolution restricting the ability of the company to issue more than 3.
Accordingly, the 2-for-1 stock split, which was subject to stockholder approval of the increase in authorized shares, will be effective on Oct.
Donohue as directors of SMSC to serve until the Company's 2009 Annual Meeting of Stockholders, ratified the selection of PricewaterhouseCoopers LLP as SMSC's registered independent public accounting firm and approved the amendment of SMSC's Certificate of Incorporation to increase the number of authorized shares of common stock of SMSC by 55,000,000 to a total amount of 85,000,000 authorized shares of common stock.
Shaw, commenting on the possibility of any such action said, "At present, we do not have enough authorized shares to permit a two-for-one stock split.
The Company keeping with its stated commitment to reduce its share structure is very optimistic that a deal to acquire this block of restricted common shares can be achieved, If the company is successful in its efforts the result will be another reduction in outstanding shares to a total of 102 million authorized shares.
With this first round of the share buy back plan, it will reduce the company's authorized shares to 142 million.

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