Can a Corporation Issue More Shares than are Authorized?
This post is based on a question that I (and others) answered on Quora: What happens when a corporation issues more shares than are authorized under the Articles of Incorporation?
Answer: The supposedly-issued shares are void – in effect, they do not exist. For the shares to be issued, the Articles (CA) or Certificate (DE) of Incorporation must be amended to increase the authorized number of shares. Then, to be safe, the shares should be re-issued pursuant to an appropriate board resolution.
Related posts:
- Must a Corporation Issue All Authorized Shares?
- How Many Shares Should My Corporation Authorize and Issue?
Dana H. Shultz, Attorney at Law +1 510 547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.
How Can I Change the Name of My Corporation?
Sometimes a corporation needs to change its name – perhaps its products or services have changed, or the name is similar to another company’s name, or there is a better way to suggest what makes the company special. This post explains how easy it is for California and Delaware corporations to change their names. (There are exceptions, but the following will apply under most circumstances.)
California corporations:
- Both the board of directors and the shareholders (before or after the board) must approve the name change. (Corporations Code Section 902(a))
- Then the corporation files a Certificate of Amendment of Articles of Incorporation.
