Disputes Between Partners, Shareholders or Members

Partnership Dispute? Consult the Attorneys of Durst Kerridge Khatskin

What is a closely held business entity?

A closely held corporation is one whose shares are owned, i.e., “closely held,” by a small number of business partners, often family members. While there is no universal definition, some states and taxing authorities have their own definitions. For example, an entire subchapter of the Delaware Code is devoted to “close corporations,” defined as those with thirty or fewer shareholders. See 8 Del. C. §§ 341-356. Limited liability companies frequently share characteristics of close corporations – they tend to be closely held by a small number of owners, referred to as “members” – and are sometimes treated like close corporations for tax and other legal purposes.