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Simple English definitions for legal terms
outstanding capital stock
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A quick definition of outstanding capital stock:
Outstanding capital stock refers to the total number of shares of a company's stock that are currently owned by shareholders. This includes both common and preferred stock. The outstanding capital stock is important because it determines the ownership and control of the company. The more shares a shareholder owns, the more voting power they have in company decisions.
A more thorough explanation:
Definition: Outstanding capital stock refers to the total number of shares of a company's stock that are currently owned by shareholders and available for trading on the stock market.
Example: If a company has issued 1 million shares of stock and 500,000 of those shares have been bought by investors, then the outstanding capital stock of the company is 500,000 shares.
Explanation: The example illustrates that outstanding capital stock is the number of shares that are currently owned by investors and available for trading. It does not include shares that have been repurchased by the company or are held as treasury stock.