Changing your company’s shares
When you form a corporation, you must list the number of authorized shares of
the corporation’s stock and the par value of those shares in the Articles of
Incorporation. In order to update this information, Articles of Amendment must
be filed with the state of incorporation.
Why it’s important
included in your Articles of Incorporation or in your Certificate of Authority
(if you’ve registered to transact business in other states) is the official
information the state has on record for your corporation. When that information
changes, it also needs to be updated with the state.
- Submitting Articles of Amendment tells the state that the
appropriate company representatives have consented to the change. For example,
consent by the incorporator or the corporation’s directors or shareholders may
- Approval by the state certifies that your
company met state legal requirements and that the information has officially
been changed with the state.
Increasing a corporation’s number of authorized shares of stock creates new shares that can be issued to existing shareholders to increase ownership percentage or sold to new shareholders to raise additional capital for the corporation. Need additional share certificates?
Keep in Mind
The number of authorized shares and/or par value may impact the franchise tax a state imposes on a corporation. Number of shares is one method some states use for calculating the franchise tax amount due. State Guides