This form is a document signifying approval of a proposal to file a restated certificate of incorporation in order to increase the authorized number of share of common stock for the corporation.
Certificate of Incorporation to Increase the
Authorized of Number of share of Common Stock
Nevada Proposal to amend restated certificate of incorporation regarding increasing authorized number of shares of common stock
State:
Multi-State
Control #:
US-CC-3-103I
Format:
Word;
Rich Text
Instant download
Description
How to fill out Proposal To Amend Restated Certificate Of Incorporation Regarding Increasing Authorized Number Of Shares Of Common Stock?
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FAQ
Can a Company Issue More Shares Than Authorized? No, a company is limited to issuing only the quantity of shares it is authorized to issue.
The number of authorized shares can be increased by the shareholders of the company at annual shareholder meetings, provided a majority of the current shareholders vote for the change.
?Authorized shares? refers to the number of shares the corporation is allowed to issue under its certificate or articles of incorporation. 10 to 15 million is a commonly used range (we set 10 million as default for the Cooley GO Docs Incorporation Package).
When companies issue additional shares, it increases the number of common stock being traded in the stock market. For existing investors, too many shares being issued can lead to share dilution. Share dilution occurs because the additional shares reduce the value of the existing shares for investors.
The corporation is not obliged to issue all authorized shares, but it may not issue more than the total without amending the articles of incorporation. The total of stock sold to investors is the issued stock of the corporation; the issued stock in the hands of all shareholders is called outstanding stock.
For example, if a company issued unauthorized shares, the relevant shareholder's votes would be meaningless and the actions on behalf of the votes could be found to be meaningless as well.
A commonly adopted starting point is to authorize 10 million shares. It provides flexibility for fundraising, hiring, and future growth. Typically, founders might initially issue themselves between 6 and 8 million shares, leaving the rest for future employees, advisors, and investors.
Paid-up capital will always be less than authorised capital as a company cannot issue shares above it authorised capital. The Companies Act, 2013 earlier mandated that all Private Limited Companies have a minimum paid-up capital of Rs. 1 lakh.
