Question: “Authorized,” “issued,” and “par value” are terms mentioned by the Kellogg Company in describing
its ownership shares. What terms are associated with capital stock and what do they mean?
Authorized. In applying to the state government as part of the initial incorporation process, company officials
indicate the maximum number of capital shares they want to be able to issue. This approved limit is the authorized
total. Corporations often set this figure so high that they never have to worry about reaching it. However, states
do allow the authorization to be raised if necessary.
Issued. The number of issued shares is simply the quantity that has been sold or otherwise conveyed to owners.