What are authorized shares? What is Par value?
What’s the difference between Authorized shares? What’s a Dividend and what is a dividend? What’s no Dividend Stock?
Dividends are actually interest paid by the company to its shareholders. However, this interest may be in the form of stock dividends. Stock dividends are not taxable unless you sell them for cash. For most companies the only stock dividends you can count are the first few years you owned the company. So you’re subject to double taxation as you have paid taxes on your interest as well.
Dividends can be in the form of money. Most companies issue stock or stocks to pay their dividend. These are known as capital gains. Authorized shares on the other hand are those shares that the shareholder has actually bought. A share of stock does not necessarily need to be issued. If you own shares of stock and you need a loan it would be classified as a loan.
Companies will issue shares to raise capital. The issuing company is known as an issuer. All companies must have an issuing company. The purpose of these shares is to provide funds for new development of the company. Most investors have to meet certain requirements. If they don’t you may not qualify for the grant.
In order to qualify you need to invest at least $300. Companies also allow tax benefits with these shares as well. This benefit is dependent upon the amount of the grant. You may be eligible for more than one of these shares. That’s why if you purchase two shares the first one automatically increases in value to its original value. This is called the dividend stock option.
Dividends may be used for many purposes. Some of the common uses are the buying of a home, paying for a vacation, and paying down debt. Another purpose may be the building of a plant or machinery.
Many people buy these shares when they’re anticipating the share price going down. They make a profit. However, they also buy them when the stock price is going up.
If a company needs cash you may be able to borrow the cash for a project or for your own use. You can borrow up to 100 percent. You can also sell your shares at any time as well. You can also borrow shares from the company if the company is in a financial crisis. However, the interest rate you will receive depends on the amount you borrowed. You also have to be very careful with these loans. Interest rates can become high.
If you want to borrow shares from your company’s credit card account you may be asked to make sure your check clears each month. In some cases the interest rate can be double what you would get in a checking account. This is called an interest rate lock.
The company may require you to pay the money back within a certain period of time. The longer you wait the more interest you’ll pay. Some companies will require you to pay a fee and may even put the fees on your next paycheck. When you borrow the shares you get a vote in the company. This vote doesn’t change when the shares trade. You will receive a notice if the share you are borrowing sells for more than you put down. This also applies if you decide to sell your shares.
What are authorized shares are only given to people who have made investments through the company that issued them. This is the company itself or their shareholders. They can choose between many companies. You don’t have to follow any of the policies set by the board of directors. They are responsible for all decisions.