Frequently the question of "what is a closely held company" comes up. This is especially the case when a person is involved in a dispute with his or her business partners.
A New Jersey closely held company is a company that is run by a few shareholders where:
- The "owners" of the company are also officers and employees of the company;
- The company files for a "S-Corporation" tax election. "S" Corp tax elections typically provide for the "pass-through" of the corporation's income to the individual shareholders.
If you are involved in a partnership dispute and your company is "closely held‚" it is important to understand that the courts will recognize the "close" relationship between you and your company and the fact that the earnings of the company are required to supprt your livelihood. This is especially important if you are a minority or non-controlling shareholder.
Watch the video below for more information about New Jersey Closely Held Companies and order a complimentary copy of his book "New York and New Jersey Partnership Dispute Guide" by clicking here.