In a corporation, who has the authority to issue new shares, the existing shareholders or the directors?
I did some research and it seems that directors are the ones who can authorize to issue new shares. This leads to the question:
If I start a corporation, and initially the corporation issues 100 shares to me so that I hold 100% of the company. Now, if I appoint someone else to be the director of the company (for example, a "trusted" friend). Does he have the authority to issue new shares? If so, he can simply authorize to issue 900 more shares to himself, making him own 90% of the company. So all of a sudden I'm screwed?
I did some research and it seems that directors are the ones who can authorize to issue new shares. This leads to the question:
If I start a corporation, and initially the corporation issues 100 shares to me so that I hold 100% of the company. Now, if I appoint someone else to be the director of the company (for example, a "trusted" friend). Does he have the authority to issue new shares? If so, he can simply authorize to issue 900 more shares to himself, making him own 90% of the company. So all of a sudden I'm screwed?