economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

and

law Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior, with its precise definition a matter of longstanding debate. It has been variously described as a science and as the ar ...

, issued shares are the

shares In financial markets, a share (sometimes referred to as stock or equity) is a unit of equity ownership in the capital stock of a corporation. It can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Sha ...

of a

corporation A corporation or body corporate is an individual or a group of people, such as an association or company, that has been authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law as ...

which have been allocated (allotted) and are subsequently held by

shareholders A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the ...

. The act of creating new issued shares is called ''issuance''. Allotment is simply the transfer of shares to a subscriber. After allotment, a subscriber becomes a shareholder, though usually that also requires formal entry in a share registry.

Overview

The number of shares that can be issued is limited to the total authorized shares. Issued shares are those shares which the

board of directors A board of directors is a governing body that supervises the activities of a business, a nonprofit organization, or a government agency. The powers, duties, and responsibilities of a board of directors are determined by government regulatio ...

and/or shareholders have agreed to issue, and which have been issued. Issued shares are the sum of

outstanding shares Shares outstanding are all the shares of a corporation that have been authorized, issued and purchased by investors and are held by them. They are distinguished from treasury shares, which are shares held by the corporation itself, thus representi ...

held by shareholders; and

treasury shares A treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market ("open market" including insiders' holdings). Stock repurchases are used as a tax efficien ...

are shares which had been issued but have been repurchased by the corporation. The latter generally have no voting rights or rights to dividends. The issued shares of a corporation form the equity capital of the corporation, and some corporations are required by law to have a minimum value of equity capital, while others may not need any or just a nominal number. The value of the issued shares is determined at the time they are issued and the value does not change, in relation to the issuing corporation after that time. Shares are most commonly issued fully paid, in which case the liability of the shareholders is limited to the amount paid on the shares; but they may also be issued shares that are

partly paid A partly paid share is a share in a company which has only partial been paid compared to the par value, with the understanding that as the company requires more funds, calls will be made from time to time to request more money until the shares are ...

, with unlimited liability, subject to guarantee, or some other form.

Basic formulae

\rm = \rm + \rm

\rm = \rm + \rm

References

External links

Detailed break down
from

Companies House Companies House is the executive agency of the British Government that maintains the Company register, register of companies, employs the company registrars and is responsible for Incorporation (business), incorporating all forms of Company, co ...

{{Stock market Corporate law Corporate finance Stock market he:הון מניות#הון מונפק

Overview

Basic formulae

See also

References

External links