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Simple English definitions for legal terms
overissue
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A quick definition of overissue:
Term: OVERISSUE
Definition: Overissue is when a company creates and sells more stocks or bonds than they are allowed to by their rules. This means they have gone beyond their limit of how much money they can raise through selling these securities.
A more thorough explanation:
Definition: Overissue is when a company issues more securities (like stocks or bonds) than they are authorized to issue based on their available capital or credit.
Example: If a company is authorized to issue 1,000 shares of stock, but they issue 1,500 shares instead, they have overissued their stock.
Explanation: Overissuing can happen when a company wants to raise more money than they are allowed to by issuing more securities than they are authorized to. However, this can be illegal and can lead to consequences like fines or legal action. It's important for companies to follow the rules and regulations around issuing securities to avoid overissuing.