Introduction To Close Corporations
Posted on January 31, 2008 - Filed Under Legal and Law | Leave a Comment
Mention the corporate entity and most people start thinking about S or C designations. In some states, close corporations are another variable that are available.
First things first – a close corporation does not refer to a closing as with a door. It refers to a limited number of shareholders. It is a unique entity that is not available in all states, but is worth a look where it is.
The close corporation was originally designed to be a more user-friendly business entity than traditional corporations. It was the LLC before limited liability companies existed. Once LLCs received favorable tax designations in the late 1980s, the close corporation became the forgotten stepsister of business entities. That being said, it offers some unique advantages.
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