• May 2019
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Shares Issued and Outstanding / Outstanding Shares

Shares issued to and currently held by stockholders. Sometimes referred to as owners’ equity or capital stock when referenced for corporate financial purposes.

When a corporation is founded, registration requirements mandate that the corporation outline how many shares of stock (maximum) can be issued to shareholders. Most of the time, a corporation does not issue the maximum number of shares allowed upon its launch. Oftentimes, a corporation has both issued shares and a number of shares authorized by its charter but still unissued to stockholders. Only issued shares may benefit from dividends or any kind of shareholder rights. Issued shares may be privately held or publicly traded. When shares are held as treasury stock or have been retired, they are generally no longer considered when calculating a corporation’s shares issued and outstanding. Shares that are issued and outstanding may be repeatedly sold/traded.

If a corporation decides to release additional shares (as allowed by its charter or an amendment to the charter) these stocks are released in a so-called secondary offering. When these additional shares are released and subsequently held by shareholders, they become issued shares.

 

EXAMPLE:

Executive: “Our corporate charter allows us to issue 1,000 shares.”

Attorney: “Correct.”

Executive: “But we have only issued 500 shares. That means we have 500 shares issued and outstanding and 500 unissued but authorized shares?”

Attorney: “Correct.”

Executive: “But let me ask you this… how much wood could a woodchuck chuck if a woodchuck could chuck wood?”

Attorney: “Had a drink with lunch, did you?”

Executive: “I might have.”