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What is the difference between authorized and issued shares?

Incorporation & entity structure

Authorized shares are the maximum the charter permits the company to issue. Issued shares are the ones actually held by founders, investors, and employees.

The gap between them is your room to grant equity later. It also drives Delaware franchise tax under the authorized shares method, which is why the default calculation produces such a large number.

We handle this for founders running US companies.

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Check your EIN confirmation letter (CP 575) first. If that is gone, look at a previously filed tax return, a business bank account application, or any 1099 you have issued. Your bank or your payroll provider will also have it on file.

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