How to Issue More Shares: Everything You Need to Know
If you're wondering how to issue more shares, you might be thinking about a business that is deciding to issue more shares of its stock in order to sell them.3 min read
If you're wondering how to issue more shares, you're probably thinking about a business that is deciding to issue more shares of its stock in order to sell them and raise capital. The resulting gain in capital is typically used by the company to finance growth. The major downside in issuing more shares is that the already existent shares will have their value diluted, affecting the current stockholders. When the company increases in size, the currently-owned shares represent a smaller portion of the entire company, lowering their value and the voting power they provide to their owners.
Important Considerations Before Issuing More Shares
For a corporation to proceed in issuing more shares, there are questions to be answered and steps to be taken. Before beginning to issue shares, you should ask yourself the following:
- How much capital do I expect to raise?
- How many shares is the company allowed to issue?
- What type of shares will be issued?
- Are there are relevant federal or state regulations I need to be aware of?