Entering an Authorized Amendment to Change the Authorized Number of a Security
We will use the following scenario to demonstrate this task, Ironwood Equity Solutions is a US-based company that issues Common stock Securities. It authorized 10,000,000 shares of its Common stock on its company formation date of February 28th, 2023.
We have already recorded the Common stock information for Ironwood Equity Solutions on the Security Screen. We must now change the authorized number of Common stock from 0 to 10,000,000. To do this, we will enter an Authorized Amendment on the Authorized Summary Screen.
Navigate to the Business Entity’s Authorized Summary Screen. In this scenario, we’ll navigate to the Authorized Summary Screen for Ironwood Equity Solutions.
The Authorized Summary Screen will open. Locate the relevant Security record and note its Number Authorized figure. In this scenario, we’ll see our Common stock security and a Number Authorized value of 0 since we have not entered any Authorized Amendments for it yet.
Select the appropriate Amendment Type from the drop-down menu. In this scenario, we’ll select Balance since we want to enter the initial number of authorized shares.
Click New Authorized Amendment.
Select the Security record whose authorized number you are changing in the Security field. In this scenario, we’ll select Common stock.
Enter the date this authorized number took effect in the [Amendment Type] Date field. In this scenario, we’ll enter Feb 28 2023 in the Balance Date field.
In the Number field, enter the number of shares you will add to or subtract from the authorized number (depending on the Amendment Type). Do not use commas. GEMS will automatically populate the Value field based on the figure you entered in the Number field and the par value of the security class in the Security field.
In this scenario, we’ll enter 10000000 in the Number field, and GEMS will automatically populate the Value field with 100,000, since our Common stock security class has a par value of .01.
Once finished, click SAVE.
The Authorized Summary Screen will re-open. The new authorized number will appear in the Number Authorized field next to the relevant Security. In this scenario, we now see 10,000,000 in the Number Authorized field for Common stock.
Once you have entered the Balance, you can use the Increase or Decrease Amendment Types to adjust the authorized number in the future.