Ownership Structure of Corporations
A key difference between "close" and "open" corporations lies in ownership share distribution. An open corporation’s stock is constantly traded, so ownership varies. A close corporation’s shares are held by a few persons, with no public trading.
Governance and Management
Directors oversee management in a corporation. Shareholders elect directors, who appoint officers to ensure the corporation works toward its goals.
Shareholder Limits and Tax Structures
A difference between private companies and close corporations is shareholder limits. Close corporations are limited to ten shareholders, though employee numbers are unlimited. Private companies have unlimited shareholders and employees. Both limit liability. Close corporations and others differ in tax structures, impacting profit and loss distribution. Close corporations operate like partnerships regarding governance flexibility. They also face stock transfer restrictions.