Increases in Authorized Shares
To ensure that your company is positioned for future growth, you will eventually need to increase available your authorized shares. Having sufficient authorized but unissued shares give you the flexibility to raise capital, pursue strategic business relationships, and expand operations
Any company that is looking to take this route needs to consider the following criteria before putting a vote for an increase in shares in front of your shareholders.
- Future Funding Needs – while it isn’t necessary to issue your authorized shares right away, they can be converted to issued shares if the board approves it. When determining the increase in shares you wish to authorize, take your analysis a step further by considering what percentage of those authorized shares you may choose to issue down the road.
- Future Key Employee Perks – businesses cannot grow without expanding their talent pool. Offering shares in the company is a great way to draw the best talent, so keep your future employees in mind when determining your expansion to authorized shares.
- Your Shareholder Base – it is critical to understand the guidelines of your investors and what they will consider a reasonable increase in shares.
The highly skilled team at Alliance Advisors will guide you in determining the extent of an increase in authorized shares that is likely to garner favorable reception from shareholders and advisory firms and position your company for continued growth.