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Corporations • Stock Issuance
CORP#022
Legal Definition
Treasury stock is stock previously issued that has been reacquired by the corporation, and can later be resold.
Plain English Explanation
A "treasury," in a literal sense, is the place in which things of value are kept, like Scrooge McDuck with his big swimming pool of gold coins. Treasury stock is stock that has been recovered or repurchased from the open market and is being held by the corporation. In other words, "treasury stock" is a way to classify stock that was, at one point, issued and owned by someone but now is owned by the corporation and kept as part of the company's treasury. It can hold onto the shares indefinitely, or it can re-sell them to raise money without having to go through the headache of creating new shares to sell.
