CLOSED CORPORATION Meaning and
Definition
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A closed corporation can be defined as a type of privately held company or corporation whose ownership is limited to a small group of shareholders. In other words, it is an organization in which the shares are held by a select number of individuals and are not publicly traded on stock exchanges.
In a closed corporation, the shareholders typically include founders, family members, or a small group of investors. These shareholders often have a close relationship and are typically involved in the day-to-day operations of the company. They may also hold various positions within the corporation, such as directors or officers.
One key characteristic of a closed corporation is the restriction on the transferability of shares. Unlike publicly traded corporations, where shares can be freely bought and sold by anyone on the stock market, shares in a closed corporation are typically subject to certain restrictions. These restrictions may include rights of first refusal, limitations on transfer to non-shareholders, or shareholder approval requirements.
Closed corporations are often used by small and medium-sized businesses that maintain a more intimate structure and wish to retain control within a closely held group of individuals. By limiting the number of shareholders and maintaining a more private nature, closed corporations often have more flexibility in decision-making and are less subject to outside influences.
Common Misspellings for CLOSED CORPORATION
- xlosed corporation
- vlosed corporation
- flosed corporation
- dlosed corporation
- ckosed corporation
- cposed corporation
- coosed corporation
- clised corporation
- clksed corporation
- cllsed corporation
- clpsed corporation
- cl0sed corporation
- cl9sed corporation
- cloaed corporation
- clozed corporation
- cloxed corporation
- cloded corporation
- cloeed corporation
- clowed corporation
Etymology of CLOSED CORPORATION
The word "closed corporation" is derived from the combination of two distinct terms: "closed" and "corporation".
The term "closed" is derived from the Old French word "clos", which means "enclosed" or "shut". It is related to the Latin word "clausus", which means "closed" or "shut in". In the context of a closed corporation, this term indicates that the corporation's ownership is limited to a specific group of individuals, usually a small number of shareholders.
The term "corporation" has its roots in the Latin word "corporatio", which means "a making into a body" or "unification into a single body". It stems from the verb "corporare", meaning "to make into a body".
Similar spelling word for CLOSED CORPORATION
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