closed corporation

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Closed corporation

A corporation whose shares are owned by just a few people, having no public market.

Closed Corporation

A company in which a small group of shareholders controls the majority of the shares. These majority shareholders tend to hold on to the company's stock, and, for that reason, only minority shares are traded, leading to light trade volume. Closed corporations are, by their nature, resistant to hostile takeovers and proxy wars. They tend to be more stable than other companies because their share prices are not determined by (sometimes irrational) investment decisions, but by the value of the company itself. However, closed corporations do not have access to as much working capital as corporations with more shareholders. They are also called closely held companies.

closed corporation

References in periodicals archive ?
First, the form of the sale could directly affect the pricing of the closely-held corporation sale transaction.
Consideration of the alternative forms of a closely-held corporation sale should also be relevant to the parties in interest to a litigation.
Alternative Structures for the Sale of a Closely-Held Corporation
In addition, Lee has extensive experience with closely-held corporations, international taxation and pass-through entities.