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Authorized shares are typically set at a high number, such as 10 million shares, in the certificate of incorporation. It is important to note that authorized shares are not the same as issued shares. Just because a company has authorized capital of 10 million shares does not mean all shares are issued. When starting a company, only a portion of authorized shares are typically issued to founders. It is important to leave room for a stock option plan and potential future financing with outside investors, who may want preferred shares.
