Because a close corporation is one whose shares are held by a relatively small group of persons, the firm often operates like a partnership.

Close Corporation

A corporation whose shareholders are limited to a small group of persons, often family members.

Shares

Units of ownership in a corporation or financial asset, representing a portion of the company and conferring certain rights and liabilities to the shareholder.

Partnership

A legal arrangement where two or more individuals engage in business together, sharing profits, liabilities, and decision-making.