A Close Company is broadly defined as a company that is controlled by:

• five or fewer participators or
• any number of participators who are also directors or
• where more than half the assets of which would be distributed to five or fewer participators, or to participators who are directors, in the event of the winding up of the company.

A participator is broadly somebody who has a share or interest in the capital or income of a company such as having share capital, voting rights or a right to capital on winding up of the company. This can be a shareholder, director or a loan creditor.

Most small private companies will meet the definition of a Close Company and there are some specific tax rules that apply to these companies. This includes, for example, where a Close Company pays for personal expenses of a director or makes a loan to one of its participators.

A Close Company is broadly defined as a company that is controlled by:

• five or fewer participators or
• any number of participators who are also directors or
• where more than half the assets would be distributed to five or fewer participators, or to participators who are directors, in the event of the winding up of the company.

A participator is broadly somebody who has a share or interest in the capital or income of a company, such as having share capital, voting rights or a right to capital on winding up of the company. This can be a shareholder, director or a loan creditor.

Most small private companies will meet the definition of a Close Company and there are some specific tax rules that apply to these companies, for example, where a close company pays for personal expenses of a director, or makes a loan to one of its participators.