finance Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...

and

law Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vari ...

, issued shares are the

shares In financial markets, a share is a unit of equity ownership in the capital stock of a corporation, and can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Share capital refers to all of the shares of an ...

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

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

. 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 (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit organiz ...

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 represent ...

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, and which generally have no voting rights or rights to dividends. The issued shares of a corporation form the

equity capital In finance, equity is ownership of assets that may have debts or other liabilities attached to them. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets. For example, if someone owns a car worth $2 ...

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

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 company registrars of the United Kingdom, falling under the remit of the Department for Business, Energy and Industrial Strategy. All forms of companies (as permitted by the Companies Act) are in ...

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

Overview

Basic formulae

See also

References

External links