Authorized shares of stock refer to the type and number of shares that a corporation can issue or has the right to issue. The articles of incorporation filed with the state must describe the type and number of shares a corporation is authorized to issue. On the other hand, issued shares of stock refer to the shares actually issued or distributed to shareholders. The number of issued shares outstanding determines ownership and voting rights in the corporation. For example, in a small company with two shareholders, the articles of incorporation may authorize 100,000 shares of common stock. However, the directors may decide to issue only 20,000 shares, with 10,000 shares issued to each shareholder. Each shareholder then owns 50% of the issued shares of stock. Together, their combined shares equal 100% of the issued and outstanding shares of the company’s stock. The remaining 80,000 shares of authorized shares may or may not be issued at some future date at the directors’ discretion.