What it is:
Capital stock is the number ofthat a company's charter authorizes for issuance.
How it works/Example:
A corporation's basic information, such as its location, profit/nonprofit status, board composition, and ownership structure. Corporate charters typically include the number of that the company is authorized to (both common and preferred stock) in total forever. The founders and board members typically decide what the amount of capital stock will be, with input from their attorneys and industry norms. The capital stock amount becomes public record when the company files the corporate charter with the secretary of state for the state in which the corporation is headquartered.is a legal document that sets forth a
Why it matters:
Capital stock is not necessarily equal to the number of shares that can ever be outstanding. If companies want to change this number, they must amend their charters. When companies do this, it may be an indication that companies intend to raise .that are currently outstanding; capital stock is the maximum number of