Close company Definition

GLOSSARY

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What does Close company mean?

Subject to some exceptions, a close company is a company (1) which is controlled by five or fewer participators, or (2) which is controlled by its directors, or (3) more than half of the assets of which would be distributed to five or fewer participators, or to participators who are directors, in the event of its winding up.

The main exceptions are that a company is not close if it is (1) based outside the UK, or (2) controlled by a non-UK resident company that would not be classified as close if it were based in the UK.

Quoted companies may not be counted as close if 35% or more of the voting power is publicly held, and if the shares that convey those votes have been traded on a stock exchange. The exception to the latter of these circumstances is if the participants' total vote exceeds 85%.

The taxation of a close company differs from that of other companies in three main ways: (1) a wider view is taken as to what amounts to

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EMI share options—checklist to determine whether a company and its employees qualify

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Checklist for establishing an EBT

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Loan relationships—late-paid interest

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Share purchase agreement—pro-buyer—corporate seller—conditional—long form

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Dive into our 19 Precedents related to Close company

A non-UK trust (A) holds shares in company B, which itself owns a UK residential property. A has also made a loan to B, which is still outstanding. For the purposes of Schedule A1 of the Inheritance Tax Act 1984 could the fact that A holds shares and debt in B result in a double charge to inheritance tax?

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If a trust’s sole asset is shares in a private company, how can expenses of the trust be paid without the trustees receiving a dividend, or borrowing funds which at some point may need to be written off?

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