The authorised share capital is the number of stocks permissible to be issued by a publicly traded company.It is the largest amount of share capital from which a company can issue.The authorised share capital indicates the maximum volume of shares of share capital a company can have and its nominal value per share.
The articles of association of a company outlines the authorised share capital of a company. Authorised share capital are not all issued to the public which implies that the authorised share capital is always greater than the issued share capital.For instance, a publicly traded company can have an authorised share capital of N5m and out of which they can have an issued share capital of N3m.
The stock exchange market regulator of any country requires a company to have a minimum amount of authorised share capital before they can be listed on the market.
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