Closely Held Corporation

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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.

BREAKING DOWN '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.

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