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| − | A '''close corporation''' is a private company that has:<ref>''[[Donahue v. Rodd Electrotype Co.]]'', 367 Mass. 578 (1975).</ref>
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| − | *(1) a small number of stockholders;
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| − | *(2) no ready market for the corporate stock; and
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| − | *(3) substantial majority stockholder participation in the management, direction and operations of the corporation.
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| − | There is no single, generally accepted definition. Some commentators emphasize an "integration of ownership and management."<ref>(Note, Statutory Assistance for Closely Held Corporations, 71 Harv. L. Rev. 1498 [1958]), in which the stockholders occupy most management positions. Kruger v. Gerth, 16 N. Y. 2d 802, 806 (1965) (Fuld, J., dissenting). Forward, 18 Law & Contemp. Prob. 433 (1953). See Helms v. Duckworth, 249 F. 2d 482, 486 (D. C. Cir. 1957).</ref> Others focus on the number of stockholders and the nature of the market for the stock. In this view, close corporations have few stockholders; there is little market for corporate stock. The Supreme Court of Illinois adopted this latter view in ''Galler v. Galler'', 32 Ill. 2d 16 (1965): "For our purposes, a close corporation is one in which the stock is held in a few hands, or in a few families, and wherein it is not at all, or only rarely, dealt in by buying or selling." ''Id.'' at 27.<ref>Accord, Brooks v. Willcuts, 78 F. 2d 270, 273 (8th Cir. 1935). See, generally, F. H. O'Neal, Close Corporations: Law and Practice, § 1.02 (1971).</ref>
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| − | == References ==
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| − | <references/>
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| − | [[category:Corporate Governance]]
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