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What is a "Closely Held Company" in India? Meaning

A registered company not being a "company in which the public are substantially interested" is considered as a closely held company.

Neither the definition of the term 'closely held company' nor the term 'widely held company' is given under any enactment.

However, a "company in which the public are substantially interested" is known as a widely held company.

The definition of "company in which the public are substantially interested" is given under sub-section (18) of section 2 of the Income-tax Act, 1961.

The opposite of widely held company is considered as closely held company.

Generally, when a small number of shareholders own a company, it is called a closely held company. It is also otherwise informally known as a privately held company.

Taxation: A closely held company do not enjoy as much tax benefits as a widely held company is allowed to.

Comments

  1. Gurrmeet Singh Kawatra19 June, 2018

    Thanks for clarifying the definition of Closely held company. I was searching for it to know what it means.

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