Unissued stock is the stock that has been authorized for use in the company’s charter but that the company has not sold (issued) either to the shareholders or other investors in the market.
Unissued stock does not accumulate nor receive dividend payments and does not have voting rights. Therefore, shareholders may not use it to cast votes in shareholders’ meetings. To the extent that the company has not sold unissued stock, stock certificates are not issued to represent this kind of stock.
The formula to calculate the total number of unissued stock is the following:
Unissued stock = authorized stock - (outstanding stock + treasury stock)
For example, if a company has 10.000 authorized stock, 5.000 outstanding stock, and 500 treasury stock, the total number of unissued stock would be 4.500.
Unissued stock and treasury stock do not have the same legal meaning.
[Last updated in August of 2021 by the Wex Definitions Team]