Closely held corporation,
Definition of Closely held corporation:
These entities differ from privately owned firms that have stock that is not publicly traded on an exchange (neither listed nor OTC). Those who own shares of closely held corporations should consult a financial planner with expertise in the tax and estate ramifications that come with this type of stock because questions of liquidity, insider status, and majority stakeholder responsibilities may come into play.
A closely held corporation is any company that has only a limited number of shareholders. Often, its stock is exchanged only infrequently but which are often listed on public exchanges, although they often also trade on over-the-counter (OTC) exchanges.
Firm (1) whose most (but not all) issued shares are held by a family or a small group of investors, (2) the number of its shares held by the outsiders or public is large enough to provide a basis for it to be listed on a stock exchange. See also closed corporation.
How to use Closely held corporation in a sentence?
- A closely held company is a publicly listed corporation that has a small number of concentrated shareholders.
- They were a closely held corporation and I think that was good because those types of organizations always last longer.
- If you are working in a closely held corporation then you may have to contact the shareholders before you make a decision.
- Trading in these shares is dominated by company insiders, and they tend to be quite illiquid with infrequent volume.
- The Smith Corporation has been a closely held corporation since its founding, and shares are held only by the direct descendants of Elias Smith and their spouses.
- Closely held companies are at less risk of a hostile takeover since obtaining a controlling interest through equity would be difficult to come by.
Meaning of Closely held corporation & Closely held corporation Definition