The authorized shares of a corporation
A) only reflects the initial capital needs of the company.
B) is indicated in its by-laws.
C) must be recorded in a formal accounting entry.
D) is indicated in its charter.

Question

Quizplus · Accepted Answer

The authorized shares of a corporation are usually indicated in its charter, also known as the articles of incorporation. This document outlines the basic information about the company, including its purpose, structure, and ownership. The authorized shares refer to the maximum number of shares that can be issued by the company, and this number is typically set by the board of directors and approved by the shareholders. It is not necessarily a reflection of the initial capital needs of the company, nor does it require a formal accounting entry.

The Authorized Shares of a Corporation