What are Authorized Amendments?
Jurisdictions such as the United States, certain Canadian provinces, Australia, and Germany often require Business Entities to authorize a specific number of Securities to be issued. GEMS records this information via Authorized Amendments on the Authorized Summary Screen.
Authorized Amendments document changes to the authorized number of Securities, detailing the value and date of each change. They can increase or decrease the number of Securities, depending on the Business Entity’s need.
What are Amendment Types?
Authorized Amendments come in several Amendment Types. Each Amendment Type records a different kind of change to the authorized number.
The three Amendment Types most relevant to entering ownership data are Balance, Increase, and Decrease. Click the names in the interactive below to learn what each of these Amendment Types does to the authorized number of a Security.
Balance Amendment | Sets the initial authorized amount when the company first authorizes Security shares. |
Increase Amendment | Records when a company authorizes more shares to be issued to investors any time after authorization of the first set of Security shares. |
Decrease Amendment | Records when a company decreases its authorized number of Security shares. This can be to prevent dilution of existing shareholders’ ownership percentage, reduce the risk of a hostile takeover, avoid administrative fees, or simply as part of a capital restructure. |