Question

What is the difference between authorized shares and outstanding shares?

Short answer

The authorized shares are the total number of shares that the company can issue. On the hand, the outstanding shares are the shares that the company has already issued.

Step-by-step solution

Definition of shares

The shares are the smallest portion of ownership in the company

Difference between the authorized shares and outstanding shares

The number of authorized shares is decided at the time of the company’s registration. Generally, The number of authorized shares are higher than the outstanding shares.