Corporations

Common Stock is the default voting stock of a corporation. In addition, a corporation may have non-voting common stock and preferred stock.

In theory, the number is arbitrary. A corporation with three shareholders could have three authorized shares or millions of authorized shares. Typical numbers are 100,000, 1 million and 10 million.

Authorized Shares means the total number of shares of stock the company is authorized to issue by its Articles of Incorporation. In contrast, Issued Shares means the number of shares of stock actually issued by the corporation to shareholders.

The main reason for setting up a corporation, S Corporation or limited liability company (LLC) is to protect investors from the company’s liabilities.