Capital Stock

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Related to authorized shares: authorized capital, Outstanding shares, Issued shares

Capital Stock

All shares constituting ownership of a business, including common stock and preferred stock. The amount of shares that a corporate charter requires to be subscribed and paid, or secured to be paid, by shareholders. The amount of stock that a corporation may issue; the amount actually contributed, subscribed, or secured to be paid on. The liability of the corporation to its shareholders after creditors' claims have been settled. The valuation of the corporation as a business enterprise.

Capital stock is distinguishable from the property and assets of the corporation. The property of a corporation fluctuates and may be greater or less than the original capital invested, but the capital stock remains intact and unaffected by the vicissitudes of business.

Undivided profits, or surplus, are not part of the capital stock, although they are included in the general capital or assets of the corporation.

The capital stock of a corporation serves only corporate purposes. It functions as security for the creditors of the corporation who have relied on its existence, since it cannot be diverted or withdrawn to the detriment of corporate creditors. Capital stock is sometimes regarded as a trust fund.

capital stock

n. the original amount paid by investors into a corporation for its issued stock. Capital stock bears no direct relationship to the present value of stock, which can fluctuate after the initial issue or first stock offering. Capital stock also does not reflect the value of corporate assets, which can go up or down based on profits, losses, or purchases of equipment. Capital stock remains as a ledger entry at the original price.

References in periodicals archive ?
Robert Corr went on further to state: "While it may appear out of line to some, this increase in authorized shares is vital for us to implement our strategic development plan.
With respect to the proposal to amend the certificate to increase the number of authorized shares of preferred stock, management believes it will provide the company with greater flexibility in connection with future transactions or other corporate purposes.
The proposed Reverse/Forward Stock Split, Right of First Refusal and Authorized Share Reduction are subject to approval by the holders of a majority of the issued and outstanding shares of Common Stock.
Increase the number of authorized shares of Common Stock, approved by approximately 97 percent of the shares voted;
Pink Sheets:NMCX) announced today that during the audit of the company's financial statements for the years ended December 31, 2004 and 2005, by the Public Companies Accounting Oversight Board (PCAOB)-registered accounting firm, the Company discovered that the number of shares issued by its in-house transfer agent exceeded the company's authorized shares of common stock.
April 14 /PRNewswire/ -- The Board of Directors of Ford Motor Company (NYSE: F) today declared a 2-for-1 stock split in the form of a 100 percent stock dividend, pending stockholder approval of an increase in the number of authorized shares.
In addition to the name change, the Schedule 14c also includes the Company's intention to increase the Company's authorized shares of capital stock from 200 million to 500 million, consisting of 400 million authorized shares of common stock and 100 authorized shares of preferred stock.
NASDAQ: WCAI) (WCA) announced today that at its annual shareholder meeting April 12, the shareholders voted to increase the authorized shares from 2 million to 10 million.
The second closing will occur within five business days after the date that the Company files a preliminary proxy statement with the SEC with respect to stockholder approval of an increase in the number of its authorized shares of common stock to at least 575,000,000 and a one-for-fifty reverse stock split of its common stock.
On March 9, 1994, the Nevada Secretary of State's Office, at CIC's request, telephoned the Boston Stock Exchange and informed the exchange that it had made a recording error regarding the number of authorized shares of CIC stock and that the correct number of authorized shares is 100,000,000 common shares and 20,000,000 preferred shares.

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