In what scenario can a corporation increase its authorized capital stock?

A corporation can increase its authorized capital stock upon the approval of both the Board of Directors and shareholders because this decision typically requires a formal process that involves consensus from those in management and ownership. The Board of Directors initiates the proposal for an increase in authorized capital stock, outlining the reasons and benefits for doing so, which is then presented to the shareholders for their approval during a meeting. Shareholder consent introduces a critical element of democratic governance in the firm, ensuring that those who hold an ownership stake have a say in substantial changes that may affect their interests.

The other scenarios—such as requiring a majority vote of all employees, increasing capital stock based on income thresholds, or doing so automatically after a certain period—do not align with corporate governance structures or regulations outlined in the Revised Corporation Code, which places authority over capital changes specifically in the hands of the Board and the shareholders.