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Close company
Practical Law UK Glossary 4-107-5926 (Approx. 6 pages)
Glossary
Close company
A company is a close company if it is a UK resident company and five or fewer participators, or any number of participators who are directors, either:
- Have control of the company (and control has a special, broader meaning for this purpose than in some other tax statutes); or
- Together possess, or are entitled to acquire, rights to receive the greater part of the assets of the company available for distribution among participators on a notional winding up (disregarding the rights any person - including one of the relevant participators - holds as a loan creditor of the company or any other company).
For the meaning of the terms "participator", "director" and other related terms, see "Control" provisions in UK corporate tax legislation: Section 450 CTA 2010.
Various descriptions of company are excluded from being a close company.
For further detail, see Practice note, Close companies: tax.