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The maximum amount of equity that your company can issue may be found in its charter or organizational documents which may vary depending on (1) the type or legal structure of your company and (2) the jurisdiction where the company was formed or incorporated.

For example, in corporations, the maximum amount of equity or its “authorized capital stock”—depending on the jurisdiction you are in—may be found in its articles of incorporation or bylaws. For limited liability companies (LLCs), the equity interest of its members may be agreed upon and set by the members in the operating agreement or membership certificates. Partnerships, on the other hand, may have the partnership interests determined in the partnership agreement including whether there are restrictions or conditions regarding the transfer of such interests.

Note that, for some types of companies, the absence of a charter or organizational document does not necessarily mean that a company has no maximum cap under the applicable law (or if there are no such legal restrictions, that a cap cannot be placed through an unwritten agreement among the owners or members). Since the facts and circumstances may vary per company, it is best to consult your lawyer about this.

Upstock does not provide legal advice and this answer is for general information and education purposes only.

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