In finance and law, issued shares are the shares of a corporation which have been allocated (allotted) and are subsequently held by shareholders.[1][2] 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.[3]

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 and/or shareholders have agreed to issue, and which have been issued. Issued shares are the sum of outstanding shares held by shareholders; and treasury shares 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.[4]

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, with unlimited liability, subject to guarantee, or some other form.[5]

Basic formulae

See also

References

  1. ↑ Usa., Int'L Business Publications (2015). United states investment and business guide: strategic and practical information. [Place of publication not identified]: Intl Business Pubns Usa. p. 155. ISBN 978-1329182400. OCLC 912476587. {{cite book}}: |first= has generic name (help)
  2. ↑ "Issued shares". TheFreeDictionary.com. Retrieved 2018-10-16.
  3. ↑ K., Shim, Jae (1999). Schaum's outline of theory and problems of financial accounting. Siegel, Joel G. (2nd ed.). New York: McGraw-Hill. pp. 233. ISBN 0071341668. OCLC 41497076.{{cite book}}: CS1 maint: multiple names: authors list (link)
  4. ↑ "Definition of EQUITY CAPITAL". www.merriam-webster.com. Retrieved 2018-10-16.
  5. ↑ Lisam, Heinrickh. "Beleggen in aandelen". beleggen.info (in Dutch). Retrieved 2018-10-16.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.