close company


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close company

a UK resident company that is controlled by five or fewer participators together with their associates or by any number of participatory directors (together with their associates). Control is determined by the persons having the right to more than 50 per cent of the company's voting rights, share capital, distributable income, or assets on a winding up. A participator is widely defined to include anyone with a financial interest in the company, e.g. shareholders and debenture holders, but excludes those dealing with a company in the normal course of business, such as trade creditors and banks.

There are three potential consequences of close company status. First, any benefit provided for a participator, or an associate, which is not taxable as employment income will be treated as if it were a distribution of profit. As such, its cost will be disallowed in computing the company's profits and will be taxed as income in the hands of the recipient. Secondly, where a loan is made to a participator, or an associate, the company will be liable to pay an amount equal to 25 per cent of the loan to the revenue, unless the loan is repaid within nine months of the end of the accounting period. If the loan is repaid after that time, then the related amount of tax is repaid. Finally, if the company is a close investment company, it will have to pay the full rate of corporation tax regardless of the level of profit. This will happen unless it exists wholly or mainly for certain specified purposes, the main ones being the carrying on of a trade on a commercial basis or investing in land to be let out on a commercial basis to unconnected parties.

References in periodicals archive ?
On January 9, The New York Post reported: " Longtime friends Padma Lakshmi and hotelier Vikram Chatwal kept close company during the holidays, and sources suspect their relationship could be more than platonic.
It's a heckuva workload speedin' through the sky at night, wearin' NYGs and makin' your way to the tanker with a bunch of fast movin' birds in close company.
Owned and bred by the Aga Khan, the twice-raced Halawan, who kept close company with Golan in a routine piece of work on the gallops earlier this week, is clearly held in high regard in the Stoute camp and could prove a surprise package in this Group 2 contest, which is traditionally regarded as the most informative stepping-stone to the Rothmans Royals St Leger.
The Dante has always been the most imformative of the Derby trials and Godolphin were determined to make it a test as Frankie Dettori went off in the front, with Dilshaan and Storming Home in close company.
In professional performance, Miller has close company.
He simply had come to realize that he preferred the close company of men to that of women.
Never before has it been necessary for an administration to make such an open call to its establishment friends; never before have the anti-establishment forces found themselves in such close company.
Fiscal 2000 brings to a close Company operations under our former business model, where we had derived revenue almost entirely from Web design, low-level hardware system integration, and maintenance of our portal," commented Jun Liang, president of Intermost.
We in Wales are privileged enough to have a language we can call our own, a genuine native tongue that we share with no other nation, although we enjoy the close company of its cousins in Gaelic, Manx, Cornish and Breton.
She lives in the same stables as the ponies and is very happy to have such close company with them.
Because of the telecoms tycoon's relationship with disgraced former Fine Gael minister Michael Lowry it might have been prudent if Mr Kenny had not been in his close company.
Religious teachers in the training centre used to give a round of the Jannat to the would be bombers and convinced them that after their death in suicide attacks their status would be equal to Sahaba-e-Karaam and that they would enjoy the close company of Hazrat Muhammad (PBUH).