Issued vs Outstanding Shares

Authorized shares are the total number of shares a company can ever issue to owners or employees or sell to outside investors, as determined by their Articles of Incorporation. Shares are authorized and then become issued or unissued. Shares issued, whether through a grant or purchase, and not held by the company are then known as outstanding shares. Unissued shares factor into the total number of authorized shares and are often reserved by the company for issuance to employees or sale to investors.

The main difference between Issued shares and outstanding shares is that issued shares are shares of a company that have been given to or are owned by an investor or company employee, whereas outstanding shares refer to all the shares that have ever been issued by a company, aka issued shares, minus the number of shares currently in the company’s treasury. 

What Are Issued Shares?

An issued share is a share of stock that has been distributed by a company.

In most cases, an issued share has been sold to an investor, and at this point, the share becomes an outstanding share as well. A company can also issue shares to its employees as an alternative or in addition to their normal compensation. A company’s issued shares count includes any shares that a company has bought back from investors or employees and holds in its own treasury. 

A company's Articles of Incorporation authorizes the total number of shares that can be issued. Companies are not allowed to issue shares beyond this number.

There are multiple reasons a corporation might issue stock shares, including:

  • Corporate investors have put cash into the business in exchange for an ownership share.
  • Obtaining another company by exchanging new shares for an ownership interest.
  • Procuring services or assets.
  • Rewarding or incentivizing corporate officers.

Finally, unissued shares are shares that have been created but have not yet been issued either to employees or in a future financing round.

How Can A Company Issue More Shares Than Authorized?

In some cases, a corporation will need or want to issue more shares than currently authorized by their Articles of Incorporation. Before they can begin issuing new shares, the current shareholders need to give their approval and the number of authorized shares listed in the Articles of Incorporation will need to be increased.

What Are Outstanding Shares Of Stock?

Outstanding shares are the total amount of company stock that has ever been issued and is currently owned by the corporation's stockholders, or any external party. This can include restricted shares and share blocks. 


With most companies, the number of issued shares and outstanding shares is the same. In larger companies, however, issued shares may be higher than outstanding shares for a variety of reasons including buybacks or unissued shares.

The owners of outstanding shares have the right to receive dividends and also have voting rights in the corporation.

How Are Outstanding Shares Calculated?

The number of outstanding shares is calculated by subtracting the number of shares held in treasury or that have not yet been issued, also called unissued shares, from the number of shares held by outside parties.

For example, after a company has bought back investor's stocks, the shares that have been purchased will no longer be considered outstanding shares, although they are still issued shares.

You can find a company’s outstanding shares count listed under Capital Stock on the company’s balance sheet.

Can Outstanding Shares Exceed Issued Shares?

The number of outstanding shares will never exceed the number of issued shares, because outstanding shares are a subset of issued shares.

The number of outstanding shares of a company can vary greatly over time. For instance, if the company decides to issue more shares, then its number of outstanding shares will naturally increase. Similarly, if the company institutes a program for repurchasing shares from investors, known as a buyback, its outstanding shares will decrease.

How a Company Treasury Relates to Issued or Outstanding Shares

In some cases, a company will own stock in itself. These shares are known as treasury stock. Unlike typical shares, treasury stock does not grant voting rights or the ability to receive dividends. 

If a company decides to sell treasury stock, those shares will convert to outstanding shares. However, this does not change the number of issued shares. 

How Does The Number of Outstanding Shares Increase?

Outstanding shares can be increased in a few ways. This happens either when newly authorized shares are sold, or unissued shares are issued.

First, there could be a secondary stock market offering such as a new round of outside funding or unissued shares being sold to existing investors or employees. 

Second, the corporation may decide to give stock options to its employees as a form of payment. 

Outstanding Shares and Initial Public Offerings (IPOs)

When an investment bank establishes the initial public offering (IPO) of a company, the bank will state the specific number of outstanding shares.

Outstanding shares are an important part of how investors calculate metrics for a corporation. In addition to market capitalization, outstanding shares can be used to calculate cash flow and earnings per share. You should be aware, however, that if you attempt to calculate earnings per share using outstanding share counts, the numbers may be inflated.

Publicly traded companies must meet several reporting requirements, including listing company stock in their balance sheet. Generally, the company will need to provide information on their outstanding and issued shares on their website or on the website of a local stock exchange.

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