Unissued Stock

Definition - What does Unissued Stock mean?

Unissued stock is stock that a company has the authorization to sell, but has not actually sold to any investors.

In the context of the law, companies have the option to sell unissued stock due to their articles of incorporation. However, many companies do not sell every single share of stock that they have the legal authorization to sell.

Justipedia explains Unissued Stock

Companies often sell shares of stock in order to generate capital for their business. It is common for large companies to issue millions of shares of stock and sell them to investors. This can generate large amounts of capital. However, the more shares of stock that a company issues, the more control it relinquishes to investors. So, sometimes companies do not sell all of their stock; instead, they keep it as unissued stock. They can sell it at a later date if they would like to.

Once a company sells shares of stock, it is no longer the legal owner of the stock. The people who buy the shares become the legal owners until they in turn sell them.

Share this:

Connect with us

Find a Lawyer