What determines how many shares a company has

Directors have responsibilities to their company and shareholders, and under the Companies Act You must register all your directors with the Companies Office and they must sign a consent form. Find out about filing an annual return — the information you need to update, how to change your filing month or request a time extension — and what happens if you don't file your annual return by the due date. Find out how New Zealand law affects the directors and shareholders of your company, and your responsibility to create and maintain accurate company records, report to us and file financial statements.

Before they can carry out some business activities, companies incorporated in other countries, including Australia, must register with the Companies Office and then keep their company details up to date. When your company closes down you need to remove it from the register.

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Creating an account with the Companies Office allows you to complete the majority of your transactions online. It's free to set up, but fees apply for some transactions, such as filing annual returns. Get help with any technical problems you have using the register, such as uploading documents or searching for companies, directors and shareholders.

The Companies Office is switching off its fax service After Friday 19 November , you will no longer be able to send us documents or queries by fax. All help topics Before you start a company 5 guides. Before you set up a company Choosing a type of company for your business Keeping company records Company meetings Reporting to the Companies Office. Many of the financial ratios used in the fundamental analysis include terms like outstanding shares and the float.

Let's go through the terms shares and float so that next time you come across them, you will know their significance. When you look a little closer at the quotes for a company's stock, there may be some obscure terms you've never encountered.

For instance, restricted shares refer to a company's issued stock that cannot be bought or sold without special permission by the SEC. Another term you may encounter is float. This refers to a company's shares that are freely bought and sold without restrictions by the public. Denoting the greatest proportion of stocks trading on the exchanges, the float consists of regular shares that many of us will hear or read about in the news.

Authorized shares refer to the largest number of shares that a single corporation can issue. The number of authorized shares per company is assessed at the company's creation and can only be increased or decreased through a vote by the shareholders. If at the time of incorporation the documents state that shares are authorized, then only shares can be issued.

But just because a company can issue a certain number of shares doesn't mean it will issue all of them to the public. Typically, companies will, for many reasons, keep a portion of the shares in their own treasury. For example, company XYZ may decide to maintain a controlling interest within the treasury just to ward off any hostile takeover bids. On the other hand, the company may have shares handy in case it wants to sell them for excess cash rather than borrowing.

This tendency of a company to reserve some of its authorized shares leads us to the next important and related term: outstanding shares. Not to be confused with authorized shares, outstanding shares refer to the number of stocks that a company has issued. This number represents all the shares that can be bought and sold by the public, as well as all the restricted shares that require special permission before being transacted.

As we already explained, shares that can be freely bought and sold by public investors are called the float. This value changes depending on whether the company wishes to repurchase shares from the market or sell out more of its authorized shares from within its treasury. Let's look back at our company XYZ. From the previous example, we know that this company has 1, authorized shares. Typically a startup company has 10,, authorized shares of Common Stock , but as the company grows, it may increase the total number of shares as it issues shares to investors and employees.

The number also changes often, which makes it hard to get an exact count. Shares, stocks, and equity are all the same thing. A share is one piece of ownership in a company. When you own shares, you are a shareholder. Owning shares in a company gives you the right to your part of the company's earnings and everything it owns. The more shares you own, the bigger the part of profits you're entitled to. When a company starts up, owners must choose an amount of stocks to authorize.

This is the total amount of stocks the company will issue to employees and investors. Not all authorized stocks are issued since some are usually held back for future investing and employee stock options.

It doesn't make sense that a company's original owners would want to share their profits with strangers or give up a piece of their business.

Most companies, at some point, need money they may not have. When this happens, there are a few options:. Bonds and loans are debt financing ; issuing stock is equity financing. Publicly Traded Companies Publicly traded companies sell stock to the general public on one of the major stock exchanges.

Subsidiaries A subsidiary is a distinctly separate firm controlled by a parent company. Articles on Public vs. These guides may be used for educational purposes, as long as proper credit is given. These guides may not be sold. Any comments, suggestions, or requests to republish or adapt a guide should be submitted using the Research Guides Comments form.