close company: meaning, definition, pronunciation and examples
C1-C2 / LowFormal, Legal, Business, Financial
Quick answer
What does “close company” mean?
A company whose shares are not publicly traded and are held by a small number of shareholders.
Audio
Pronunciation
Definition
Meaning and Definition
A company whose shares are not publicly traded and are held by a small number of shareholders.
In tax and corporate law, a company under the control of a small group of individuals, often with restrictions on share transfers, and subject to specific legal regulations concerning taxation, benefits, and loans to participants.
Dialectal Variation
British vs American Usage
Differences
Primarily a UK term. The US equivalent concept is a 'closely held corporation' or 'close corporation' (though laws vary by state).
Connotations
In the UK, it is a precise legal and tax classification. In the US, 'closely held' is a descriptive business term, not a single universal statutory definition.
Frequency
Very high frequency in UK legal and financial contexts; the term 'close company' is rarely used in American English outside of comparative law.
Grammar
How to Use “close company” in a Sentence
[Company] + is/be + a close company.The legislation defines + [entity] + as a close company.Directors of a close company + verb (e.g., must declare).Vocabulary
Collocations
Examples
Examples of “close company” in a Sentence
verb
British English
- The business was incorporated and immediately classified as a close company.
American English
- N/A for 'close company'. The US would use: 'The firm was structured as a closely held corporation.'
adverb
British English
- The company is closely held (using the adverbial form of the US synonym).
American English
- The business is closely held by three brothers.
adjective
British English
- The close company rules are complex.
- They operate a close company structure.
American English
- N/A for 'close company'. The US would use: 'The closely held corporation rules vary by state.'
Usage
Meaning in Context
Business
Used when discussing company structure, shareholder agreements, and succession planning for family businesses.
Academic
Used in law, finance, and business studies texts discussing corporate governance and taxation.
Everyday
Virtually never used in everyday conversation outside of specific professional contexts.
Technical
A precise term in UK tax law (Corporation Tax Act 2010) and corporate law.
Vocabulary
Synonyms of “close company”
Strong
Neutral
Weak
Vocabulary
Antonyms of “close company”
Watch out
Common Mistakes When Using “close company”
- Confusing it with 'closed company' (which might imply a company that has ceased trading).
- Using it to describe a company that is physically/nearby ('close' as an adjective of proximity).
- Applying the term in a US context.
FAQ
Frequently Asked Questions
Not exactly. Most private limited companies are close companies, but 'close company' is a specific tax law definition. A large private company with many unrelated shareholders might not be 'close'.
Yes, absolutely. Being a 'close company' refers only to its ownership structure, not its size or number of employees. It can have many employees.
There are several, but a key one is that certain loans or benefits provided to shareholders (participators) may be subject to additional taxes as if they were dividends.
Often for control and privacy. It allows a small group (e.g., a family) to retain full control, avoid the regulatory burdens of a public listing, and keep financial affairs private.
A company whose shares are not publicly traded and are held by a small number of shareholders.
Close company is usually formal, legal, business, financial in register.
Close company: in British English it is pronounced /ˈkləʊs ˌkʌmp(ə)ni/, and in American English it is pronounced Not standard. The US term is '/ˈkloʊsli hɛld ˌkɔːrpəˈreɪʃ(ə)n/'.. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “None directly associated.”
Learning
Memory Aids
Mnemonic
Think of a CLOSE-knit group of shareholders, keeping the company CLOSED off from public stock markets.
Conceptual Metaphor
A COMPANY IS A CONTAINER (with limited access).
Practice
Quiz
Which of the following is the primary US equivalent of the UK term 'close company'?