Unissued Stock Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Unissued Stock, written in plain English, along with examples of how it is used.
What is Unissued Stock?
(n) It is the portion of share of stock which is not issued to public. In many companies they issue the portion of the authorized to the public when it require capital. Balance of the authorized capital is kept towards the future capital requirement. These shares are never issued in the past as against the treasury stock which was issued but re-purchased.
History and Meaning of Unissued Stock
Unissued stock refers to the portion of authorized shares of a company that are not issued or sold to the public. Companies typically issue only a portion of their authorized shares to raise capital, with the remaining shares set aside for possible future use. These unissued shares can be used to raise additional funds, to reward employees or investors, or to make acquisitions or mergers.
Examples of Unissued Stock
Company A has authorized 1,000,000 shares of stock, but has only issued and sold 500,000 shares to the public. The remaining 500,000 shares are classified as unissued stock.
A startup company may authorize a large amount of shares in preparation for future funding rounds or potential acquisitions, but may only issue a portion of those shares in the initial public offering (IPO).
A publicly-traded company may hold unissued stock as a strategic reserve to protect against potential takeover attempts or to make large acquisitions.
Legal Terms Similar to Unissued Stock
Authorized stock: The total number of shares of stock that a company is authorized to issue, including both issued and unissued shares.
Treasury stock: Shares of a company's own stock that have been issued and subsequently repurchased by the company. Unlike unissued stock, treasury stock has been issued to the public at some point.
Outstanding stock: The total number of shares of a company's stock that have been issued and are currently held by investors. This includes both publicly traded shares and shares held by insiders or institutional investors.