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Here's what a "closely-held corporation" is

The Supreme Court's decision in Burwell v. Hobby Lobby finds that "closely-held corporations" are not required to provide workers with contraceptives — bringing a whole lot more attention to an arcane term from the Internal Revenue Service. Luckily, the IRS has previously spelled out in plain English in a FAQ from January 2014:

Question: Can you give me plain English definitions for the following: (1) a closely held corporation, (2) a personal holding corporation, and (3) a personal service corporation?
Answer:
Generally, a closely held corporation is a corporation that:
Has more than 50% of the value of its outstanding stock owned (directly or indirectly) by 5 or fewer individuals at any time during the last half of the tax year; and
Is not a personal service corporation.
The definitions for the terms "directly or indirectly" and "individual" are in Publication 542, Corporations.
A closely held corporation is subject to additional limitations in the tax treatment of items such as passive activity losses, at-risk rules, and compensation paid to corporate officers.

According to Inc., 90 percent of all companies in the US are closely held:

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