Authorised share capital

The total nominal value of the shares of a company which a company has formal authority to issue (or allot) to shareholders.

The life cycle of of a share can include - in this order:

(1) Authorisation of the company to issue a maximum total cumulative number of shares.

(2) Issue by the company of shares to shareholders, also known as allotment.

(3) Calling up by the company for the shareholders to pay the nominal value of the shares to the company, if not already done.

(4) Payment by the shareholders, into the company, of the amounts due.

With the relevant authority, companies may also redeem and cancel shares in issue, or repurchase them to hold them "in treasury".

Outstanding shares are ones that remain held by shareholders, following such of the processes (above) that have been undertaken.

See also