Is there a limit to how many shares of stock a company may issue?

Question

After a company issues stock, can more people than what is issued trade that stock? I thought stock was issued to fund company endeavors originally. There must be a limit to how many shares of stock in a company that can be traded, limited by how many were issued ?

Answer 1

Nope, a company can choose to issue more stock at any point.

Answer 2

The number of shares permitted to be issued by a company is restricted to the amount dictated in the articles of incorporation. You are correct that company stock is issued to fund the company and the reason for placing a limit is to preserve the ownership percentage for the investors. Typically the number of shares permitted to be issued by the company can be increased by a sharholder vote to amend the articles and is routinely done with smaller companies needing to finance continued operations or for expansion reasons. Once the shares are issued and held in the secondary market there is no limit to the velocity of the trading...i.e. how many of the issued shares can change hands during any particular time interval. Typically a company's articles give the board of directors an open authorization to buy back shares (therefore reducing the outstanding shares and increasing each owners % interest in the company) when they see fit. It would be very rare for the articles to provide the board with an open authorization to increase the number of shares issued without a vote by the shareholders.

Answer 3

A company can issue only the # of shares it has authorized in the state of incorporation. When you incorporate, you specify the # of shares the company will have. This can be amended at any time. Also, if a company does become heavily traded and needs more shares, it will announce a share split. For example, 2 for 1 would mean that every share will now be 2 shares. Companies can also buy back shares from the public - this is often done in order to satisfy employment contracts, e.g. when a company promises shares to an executive, etc.

Answer 4

First -- the companies aren't involved in buying or selling shares in the secondary market. It is individuals who own these shares who buy and sell them.

There are two reasons why volume can seem too high. The first is that there may be day traders involved and the second is that there may be short-sellers involved.

Day traders will buy shares and sell them for a small profit almost immediately. Doing this inflates the number of shares bought and sold.

Short-selling involves selling shares that you do not own. You can sell shares that you don't own by borrowing the shares through your broker and selling them. You leave most of your proceeds in the brokerage account until you buy shares later andd replace the borrowed shares with the ones you bought. You hope to buy them back at a lower price and keep your profit.

If the company wants to raise more funds, it can do so by issuing new shares through a Seasoned Offering.

See wikipedia for more information

Answer 5

Yes. I work for an attorney, and I set up corporations and limited liability companies. I don't know the criteria, though, for determining the number of shares that are authorized and I don't know if there is always a limit to the number that can be issued. It's just that every one I've set up has had a limit.

Answer 6

Yes there is. When a company incorporates, it makes a request, and is authorized to issue a certain number of shares of stock. However, it is possible for a company to file new corporate documents and request additional shares. The shareholder usually have to approve this

Answer 7

In straightforward words it quite is a sophisticated way of playing. it quite is one in each and every of those public inner maximum partnership, the place the enterprise sells its shares initially via an preliminary public supply (IPO) then this enterprise is indexed on the share marketplace the place people purchase and sell them. Now as quickly as you purchase some shares you grow to be a share holder in the enterprise no remember even no remember if it quite is a million share. in fact the fee of a share is going up and down based upon the no of share offered over the final cost and is going down no remember if it quite is on the market under the final cost. this relies upon upon the overall performance of the enterprise and peoples pastime and way forward for the enterprise. and this is going on daily. consequently referred to as as share procuring and merchandising