The authorized stock of a corporation

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The authorized stock of a corporation is indicated in its charter, which is a legal document filed with the state government when the corporation is formed. The charter sets forth the company's purpose, name, location, and other important information, including the authorized number of shares of stock that the corporation is permitted to issue. The amount of authorized stock is not necessarily indicative of the initial or ongoing capital needs of the company, nor does it need to be recorded in a formal accounting entry.

The Authorized Stock of a Corporation