What are authorised shares?
Updated over a week ago

Authorised shares are all of the shares which a company is allowed to issue to its shareholders. Companies in many jurisdictions use the concept of “authorised share capital” and “issued share capital” when describing their size and ownership structure.

The shareholders specify a maximum authorised share capital in the company’s Articles of Association. This is an upper limit on the shares that can be issued when the company is incorporated and later on.

The directors of the company can issue shares up to the total amount of authorised shares, without needing to ask for shareholder consent. If the company wishes to issue more shares, the authorised share capital will need to be increased. This can only be done with board and shareholder consent. The authorised share capital may consist of shares of different classes.

Authorised shares are different from issued shares, which are the shares that have actually been issued by the company to the shareholders. Not all authorised shares have to be issued.

Not every jurisdiction requires companies to have an authorised share capital.

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