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Definition
A close company is a UK resident company controlled by five or fewer participators, or by its participator-directors. Most private, owner-managed limited companies fall into this category.
In plain terms
It's the technical label for the typical small company you run yourself. The main practical effect is the special tax treatment of money lent to directors and shareholders.
Why it matters for your company
Close-company status is why an overdrawn director's loan account attracts the section 455 charge. See the director's loan account explained.
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Read →Funding for UK limited companies
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