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TeachMeFinance.com - explain Close corporation historic definition... Close corporation -- Name given to an incorporated company the stock of which is held by a few persons and is not for sale. When a private business is continued as an incorporated company instead of a partnership and stock is allotted to each partner for his interest or share in the business the company is called a close corporation. An entirely new business or enterprise, however, may be and often is started as a close corporation instead of a partnership. Usually there is an agreement among the stockholders whereby each is prohibited from disposing of or transferring his stock without the consent of the others. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2007 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.