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What happens if a company issues more shares than it has authorized?
Incorporation & entity structure
The excess issuance is generally void or voidable under Delaware law, which means the holders may not actually own what they think they own.
Delaware has a ratification procedure to clean this up, but it is a legal process with cost and delay attached. It surfaces in diligence, which is the worst time to find it.
We handle this for founders running US companies.
