Also known as: unissued stocks · unissued shares
Written by attorneys · grounded in primary & secondary sources — see below
Authorized shares of a corporation that have not been issued to shareholders, including shares previously issued and later repurchased by the corporation. Such shares remain available for future issuance by the board without altering the rights attached to already outstanding shares.
Upland Industries' articles contain no preemptive-rights provision. The board resolves to issue 100,000 previously authorized but unissued common shares to a new strategic investor. Existing shareholder Uma Upadhyay demands the right to purchase a proportional block. The board proceeds with the issuance because the articles never elected preemptive rights over unissued shares.
Ulysses Maritime's articles authorize 500,000 unissued shares. The founder conveys a remainder interest in those shares to his grandchildren, subject to an open class that may increase for decades. The limitation is upheld because the subject matter consists of unissued corporate shares.
Select any source to read its text and confirm it supports the definition.
Ultrasonic Dynamics buys back 20,000 shares from retiring founder Uriah Urban. The articles contain no prohibition on reissuance. The board treats the reacquired shares as authorized but unissued and later reissues them to new employees under an equity plan.
Uptown Apparel's founder limits a class gift of future unissued shares to all then-living descendants, with membership potentially expanding for generations. The gift is upheld solely because the subject matter is unissued corporate shares.
Uliana Ustinova's corporation faces a proxy contest. The board creates a new series of preferred stock solely from authorized but unissued shares and issues the entire series to a friendly investor. The issuance dilutes the challenger's voting power without any shareholder vote.
Umar Usmani owns shares in a target corporation. In a cash-out merger the acquiring company values the target using only outstanding shares. The court confirms that authorized but unissued shares are excluded from the valuation because they have never been issued.
No. Shareholders have no preemptive right to acquire a corporation's unissued shares unless the articles of incorporation expressly provide for such rights.
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Repurchased shares become authorized but unissued shares unless the articles prohibit their reissue, in which case the authorized share count is reduced.
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Yes, when the articles expressly authorize the board to classify or reclassify unissued shares and to fix their terms, the board may do so without further shareholder approval.
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Limitations on unissued corporate shares are exempt from the rule against perpetuities under the Restatement (First) of Property.
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No. Only issued and outstanding shares are counted. Authorized but unissued shares are excluded from the valuation base.
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…was reached between the two companies whereby Signal agreed to purchase from UOP 1.5 million of UOP's authorized but unissued shares for a price of $21 per share. This purchase, however, was made contingent upon Signal making a successful cash tender offer for 4.3 million publicly held shares of UOP, also at a price of…