closely held corporation
Definition
Noun: A type of corporation whose stock is not publicly traded on a stock exchange. Instead, the majority of its shares are owned by a small number of individuals, often members of a family, a small group of investors, or the company's founders.
Usage
This term is used in business and finance to describe a private company structure. It emphasizes that ownership is concentrated and not available for purchase by the general public. * The decision-making was swift because it was a closely held corporation owned by three partners. * Many family businesses are structured as closely held corporations to maintain control.
Advanced Usage
- Legal and Tax Context: The structure of a closely held corporation has specific implications for liability, taxation (often taxed as an S-corporation in the U.S.), and governance rules that differ from publicly traded companies.
- The closely held corporation elected S-corporation status to avoid double taxation.
- Contrast with Public Companies: This term is often used in contrast to a "publicly traded corporation" or "public company."
- Unlike a closely held corporation, a public company must answer to a vast number of shareholders.
Variants and Related Words
- Close Corporation (or Closed Corporation): A synonym, sometimes used interchangeably, though specific legal definitions can vary by jurisdiction.
- Privately Held Company: A broader term that includes closely held corporations as well as other business structures like LLCs and partnerships that are not publicly traded.
- Publicly Traded Corporation: The direct antonym; a company whose shares are bought and sold on public stock exchanges.
Synonyms
- Private corporation
- Close(d) corporation
- Privately held company (in a general sense)
Antonyms
- Publicly traded corporation
- Public company
- Listed company
Noun
-
stock is publicly traded but most is held by a few shareholders who have no plans to sell
