A company’s outstanding shares refer to the total number of shares a corporation has issued to investors.
A corporation is formed by filing a Certificate of Incorporation with the relevant governmental authority. Within the certificate, the corporation specifies how many authorized shares and classes of stock a corporation may issue.
Example Outstanding Shares for Corporation A
For example, Corporation A, a Delaware corporation, files a Certificate of Incorporation with the State of Delaware which authorizes the following shares:
- 10,000,000 shares of Class A Voting Common Stock with a Par Value of $0.001 per share
- 1,000,000 shares of Class B Nonvoting Common Stock with a Par Value of $0.001 per share
- 10,000 shares of Preferred Stock with a par value of $0.001 per share
As of December 31, 2023, the corporation’s Class A common shares authorized totaled 10,000,000 per the corporate charter. At the end of the year, the corporation had issued 4,000,000 Class A shares of the total 10,000,000 authorized shares.
The corporation has yet to issue any Class B or preferred shares. The corporation’s total outstanding shares are the 4,000,000 shares issued to investors.
The corporation is authorized to issue another 6,000,000 shares of Class A Common Stock; however, those shares have not yet been issued, so they are NOT outstanding shares.