Closely Held Corporation

AAA

DEFINITION of 'Closely Held Corporation'

Any company that has only a limited number of shareholders. Closely held corporation stock is publicly traded on occasion, but not on a regular basis. These entities differ from privately owned firms that issue stock that is not publicly traded. Those who own shares of closely held corporations should consult a financial planner with expertise in the tax and estate ramifications that come with owning this type of stock.

INVESTOPEDIA EXPLAINS 'Closely Held Corporation'

Despite the fact that its stock is listed, many transactions between major shareholders and closely held corporations do not receive the same preferential tax treatment as those of corporations with actively traded stocks. Deductions and losses may not be allowed in some instances for parties involved in these transactions.

RELATED TERMS
  1. Alien Corporation

    A corporation that was created in another country. Alien corporations ...
  2. Close Corporation Plan

    A form of business buy-sell agreement. Close Corporation Plans ...
  3. Subchapter S (S Corporation)

    A form of corporation that meets the IRS requirements to be taxed ...
  4. Corporation

    A legal entity that is separate and distinct from its owners. ...
  5. Closed Corporation

    A business that is set up using a corporate business structure, ...
  6. Poison Put

    A takeover defense strategy in which the target company issues ...
RELATED FAQS
  1. What happened to Nathan Rothschild's estate after his death?

    The Rothschild family has been involved in global finance for centuries. Nathan Rothschild was among those responsible for ... Read Full Answer >>
  2. What is the relationship between minority interest discount and fair market value?

    Most investors are unwilling to pay fair market value for a minority ownership interest in a business; minority interests ... Read Full Answer >>
  3. How do modern companies assess business risk?

    Before a business can assess or mitigate business risk, it must first identify probable or likely risks to its bottom line. ... Read Full Answer >>
  4. Why has emphasis on corporate governance grown in the 21st century?

    Corporate governance refers to operational practices, management protocols, and other governing rules or principles by which ... Read Full Answer >>
  5. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    After a prolonged period of corporate scandals involving large public companies from 2000 to 2002, the Sarbanes-Oxley Act ... Read Full Answer >>
  6. Why should investors research the C-suite executives of a company?

    C-suite executives are essential for creating and enacting overall firm strategy and are therefore an important aspect of ... Read Full Answer >>
Related Articles
  1. Budgeting

    Managing Income During Retirement

    Learn some sensible strategies for making your hard-earned savings last for as long as you need them.
  2. Retirement

    Establishing A Revocable Living Trust

    This arrangement allows you to have more control over your estate - both before and after your death.
  3. Investing Basics

    Explaining Tender Offers

    A tender offer is a broad public offer made by a person or company to purchase all or a portion of the shares of a publicly traded company.
  4. Fundamental Analysis

    Can Japan's Stewardship Code Turn Passive Funds Into Active Managers?

    Institutional investors in Japan have been criticized for being too cozy with corporates. Can a code force them to focus on the needs of beneficiaries?
  5. Investing Basics

    Explaining Non-Controlling Interest

    Technically, a non-controlling interest is any percentage of ownership that is less than 50% of a company’s voting equity.
  6. Entrepreneurship

    Comparing Impact Investing & Venture Philanthropy

    Impact investing and venture philanthropy might be similar, but there are differences and one is more popular than the other right now.
  7. Investing Basics

    Explaining Privatization

    For a publicly traded company, privatization is the act of transitioning the company to ownership by private individuals.
  8. Economics

    Why To Pay Attention To Today’s Buyback Boom

    There has been a lot of debate recently about whether today’s buyback boom, $133 billion for S&P companies, is good or bad for the economy and for markets.
  9. Investing

    The Strong Dollar’s (Real) Toll On Tech Stocks

    A large portion of U.S. technology companies’ sales occur overseas, given the strong international business and consumer demand from many U.S. tech firms.
  10. Stock Analysis

    Google Stock: A Tale of Two Share Classes

    Google stock comes in two different flavors with different rights for shareholders.

You May Also Like

Hot Definitions
  1. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  2. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  3. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  4. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  5. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  6. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!