Issued shares vs authorized shares for Delaware franchise tax
How Delaware startup founders should separate authorized shares, issued shares and treasury shares before comparing tax methods.
Summary
Authorized shares are the maximum shares the corporation can issue under its charter. Issued shares are shares actually issued to stockholders, and treasury shares are issued shares held by the corporation. Delaware franchise tax method comparison depends on keeping these numbers separate.
Authorized shares and issued shares are not interchangeable inputs.
| Authorized shares | Charter maximumUsed directly by the Authorized Shares Method. |
|---|---|
| Issued shares | Actually issuedNeeded for Assumed Par Value inputs. |
| Treasury shares | Issued then held by companyCan matter in the issued-share fact pattern. |
Why the distinction matters
The Authorized Shares Method starts with the number of authorized shares. The Assumed Par Value Capital Method needs issued-share and gross-asset facts. Mixing the two methods creates a weak annual report packet.
Example
A corporation may have 10,000,000 authorized shares but only 6,500,000 issued shares. Those numbers belong to different parts of the method comparison. The difference can be material.
Hard stops
Stop if the corporation has no-par shares, uncertain cap table facts, amendments during the year, zero issued shares with unclear status, or consolidated financials without standalone gross-asset support.
Common questions
Can I use authorized shares as issued shares?
No. They are different cap table facts. Using the wrong number can distort the Assumed Par Value comparison.
Where do I find issued shares?
Check board approvals, stock ledgers, cap table software, equity platform exports, and company records. Do not guess.
Related guides
Why Delaware startup franchise tax looks high with many authorized shares
A direct explanation for founders who see a large Authorized Shares estimate on a small startup.
Delaware franchise tax with zero issued shares
A hard-stop page for Delaware corporations whose cap table says no shares have been issued.
When is Delaware Franchise Tax due?
The March 1 annual report and franchise tax deadline for active domestic Delaware corporations.
Official sources
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