Closed Corporation

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Closed Corporation

A type of business corporation that is owned and operated by a small group of people.

A closed corporation is also known as a close corporation, a family corporation, an incorporated partnership, and a chartered partnership. In this type of corporation all of the functions are usually performed by the same parties. These individuals serve as shareholders, officers, and directors and are involved in the management and operation of the business. A closed corporation differs from a publicly held corporation since its stock is neither issued nor traded to the public at large.

References in periodicals archive ?
In Estate of Pauline Welch,[11] the decedent was a minority stockholder in two closely-held corporations. The valuation date for estate tax purposes was the date of death, March 18, 1993.
Commissioner,[4] where the taxpayer held stock in a closely-held corporation which was an investment holding company.
The personal holding company provisions were originally intended to prevent individual taxpayers from using closely-held corporations to avoid individual income taxes on investment and other specific types of income.
The rental of a commercial building is the sole business of a newly formed closely-held corporation. For the first three years, the corporation reported a loss from the activity.
Although control of publicly-held corporations frequently is obtained through the acquisition of stock, the buyers of closely-held corporations normally prefer to acquire the assets of the business.
The owners of a closely-held corporation may want to sell their businesses for a variety of reasons.
First, the form of the sale could directly affect the pricing of the closely-held corporation sale transaction.
Certainly, if the business owners ask the business appraiser to advise them regarding the net proceeds to expect from the sale of their closely-held corporation, then consideration of the alternative tax forms of corporation sale is essential to the valuation analysis.