closed (adjective, closed, \ kloʊzd \) corporation (noun, cor-po-ra-tion, \ ˌkɔːrpəˈreɪʃn \)
Definition: is a corporation type in which all the distributed shares are owned either by a single family or by a closed circle of investors, which means that such a company can’t be purchased by the public. In addition, all the major posts are usually held by the owners as they perform and oversee all the essential functions and operations of a business. When a shareholder of a closed corporation wants to sell his shares, they are always bought by the rest of the existing shareholders.
In a Sentence:
- Over the years, hundreds of potential investors wanted to become a part of Enlightened Solutions, but since they are a closed corporation, all the shares are equally distributed among the five founders.
- If you have a family business, it makes sense to go for the closed corporation type of organization. This way, you can make sure that an unfamiliar and unreliable individual won’t purchase any of your shares.
Synonyms and related words: close corporation, closely held corporation, family corporation, privately held corporation
