Entity Types

Closely Held Business

Closely Held Business

A closely-held business is a business entity whose shares are held by only a small number of stockholders. The stockholders typically have a common interest in the company—family members—and the shares of stock are generally not traded in the public stock market. The family holds large ownership and voting control over the business and this ownership is hard to takeover. Closely-held businesses tend to have stronger balance sheets and a longer-term outlook—the family cares about the long-running of the business, unlike management who may just want to get paid short term.