III. CAPITAL STOCK STRUCTURE
A. Debt Securities
B. Equity Securities (Shares)
3. Stock Subscription
- DEBT SEC: Arise where corp has borrowed $ from outside investors and promises to repay them. Holders do NOT have ownership interest.
- May be secured (bond) or unsecured (debenture)
- EQUITY (SHARES): Give holders ownership interest.
- Authoirzed Shares: Described in AOI.
- Issued and Outstanding: shares sold and outstanding.
- Authoirzed but Unissued: shares reacquired by corp via repurchase or redemption.
CLASSIFICATION: Common Shares: 1 type of share. Each owner equal ownership right. OR may be dividided into classes or series within a class.
CLASSES AND SERIES: Must be described in AOI. AOI Must: (i) prescribe the # of shares of each class, (ii) prescribe a distinguishing designation for each class, (iii) either describe the rights, preferences, and limitations or provide it'll be determined by BOD prior to issuance.
STOCK SUBSCRIPTION: Promises from subscribers to buy stock in the corp.