Authorized Shares

The video tutorial explains the process of forming a corporation by filing articles of incorporation, issuing shares, and understanding the concepts of authorized, issued, and outstanding shares. It covers the need to amend articles for additional shares, the distinction between common and preferred stock, and the effects of stock splits and dilution on ownership. Key terms like stock options, repurchases, and buybacks are also discussed.

What is the primary purpose of filing articles of incorporation?

• To register the business name

• To certify the existence of a corporation

• To apply for a business loan

• To hire employees

What does it mean when shares are 'issued'?

• They are reserved for future use

• They are distributed to shareholders

• They are used for employee bonuses

• They are canceled

Why might a company need to amend its articles of incorporation?

• To change its logo

• To change its business address

• To hire new executives

• To authorize additional shares

What happens to the number of shares during a stock split?

• The number of shares is halved

• The number of shares remains the same

• The number of shares is doubled

• The shares are canceled

How does issuing additional shares affect existing shareholders?

• It dilutes their ownership percentage

• It increases their ownership percentage

• It has no effect on their ownership

• It gives them more voting rights