Opinion ID: 3161633
Heading Depth: 2
Heading Rank: 2

Heading: Characteristics of Closely Held Corporations

Text: ¶34. “A close corporation is a business entity with few shareholders, the shares of which are not publicly traded.” Fought v. Morris, 543 So. 2d 167, 169 (Miss. 1989). “Management typically operates in an informal manner, more akin to a partnership than a corporation.” Id. A close corporation functions as a small business, when “the shareholders, directors, and 15 managers often are the same persons.” Id. at 170. Close corporations often are made up of family members when the directors, officers, and shareholders are the same. Id. at 171. “Each contributes . . . capital, skill, experience, and labor to the company. Management and ownership are substantially identical. Each shareholder has an inside view of the company's operations and maintains an element of trust and confidence in each other which is commonly lacking in a large or publicly-held corporation.” Id. ¶35. The parties here, as brother and sister, both served as officers, directors, and sole shareholders of the corporations. We find that the Restaurant, the Trailer Park, and the Campground companies undoubtedly are closely held corporations.