Capital Stock Law and Legal Definition

Capital stock is the total number of shares of stock authorized for issue by the charter or articles of incorporation of a corporation. It includes both common stock and preferred stock. If the owners of majority of the outstanding shares consent, a corporation may increase the amount of capital stock.

Capital Stock can also be the stated or par value of the permanently invested capital of a corporation. Common stock is often called capital stock if it is the corporation's only class of stock outstanding.