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So, what is the major difference between a General Corporation and a Close Corporation? A General Corporation can have as many shareholders as it sees fit. With a Close Corporation, there are restrictions on the sale or transfer of stock.
Close Corporations Key Features a Close Corporation (cc) is a legal entity. Audited financial statements are not required for Close Corporations. Meetings are not compulsory and can be held on an ad hoc basis. Close Corporations (CCs) may become shareholders in other companies.
What are the Characteristics of Corporations? Capital Acquisition. It can be easier for a corporation to acquire debt and equity, since it is not constrained by the financial resources of a few owners. Dividends. A corporation pays its investors by issuing dividends to them. Double Taxation. Life Span. Limited Liability.
A CC is similar to a private company. It is a legal entity with its own legal personality and perpetual succession and must register as a taxpayer in its own right. A CC has no share capital and therefore no shareholders. The owners of a CC are the members of the CC.
A close corporation is a corporation which is held by a limited number of shareholders and is not publicly traded.
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The resale value of shares held in a close corporation is often limited. There is a limited market available to sell shares of a close corporation. In some instances, there may not be any market at all.
Other popular close corporation names include H-E-B, Deloitte, PricewaterhouseCoopers (PwC) and Publix Super Markets.
A close corporation often costs more money to organize. While shareholders have the benefit of greater control over the sale of shares, shareholders in a close corporation are also burdened with increased responsibility. A close corporation has to be governed by both a shareholders agreement and the company bylaws.
A close corporation is a corporation which is held by a limited number of shareholders and is not publicly traded.
Pros of Close Corporations Fewer formalities. The most obvious advantage of a close corporation is fewer rules to follow. Limited liability. In general, shareholders of a close corporation are not personally liable for the businesss debt. More shareholder control. More freedom.

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