In
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 f ...
and
law, 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 ...
of a
corporation
A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...
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 ...
. 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 orga ...
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 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, with unlimited liability, subject to guarantee, or some other form.
Basic formulae
:
:
See also
*
Share capital
A corporation's share capital, commonly referred to as capital stock in the United States, is the portion of a corporation's equity that has been derived by the issue of shares in the corporation to a shareholder, usually for cash. "Share capital ...
*
Shares outstanding
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 ...
*
Treasury shares
References
External links
Detailed break downfrom
Companies House
{{Stock market
Corporate law
Corporate finance
Stock market
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