Who has the authority to increase the number of authorized shares?

Who has the authority to increase the number of authorized shares?

• A. Shareholders at annual meetings with a majority vote
• B. The central bank
• C. Board of directors only
• D. The company's auditors

Answer: (A)

Changing the number of authorized shares is a change to the company’s charter, which requires the approval of the owners of the company. The board can propose the increase and arrange the vote, but the actual permission comes from the shareholders, typically decided at an annual meeting with a majority vote (some charters or bylaws may require a supermajority). The central bank has no role in corporate charter changes, and auditors do not have authority to approve such actions. So the authority to increase authorized shares lies with the shareholders.

Changing the number of authorized shares is a change to the company’s charter, which requires the approval of the owners of the company. The board can propose the increase and arrange the vote, but the actual permission comes from the shareholders, typically decided at an annual meeting with a majority vote (some charters or bylaws may require a supermajority). The central bank has no role in corporate charter changes, and auditors do not have authority to approve such actions. So the authority to increase authorized shares lies with the shareholders.