Taxes Consolidation Act 1997 section 430

Meaning of "close company"

Section 430 defines the meaning of a "close company" for corporation tax purposes and sets out the exceptions to that definition.

• A close company is broadly one controlled by five or fewer participators, or by participators who are directors — regardless of how many such director-participators there are.
• Certain companies are excluded from the definition: non-resident companies, registered industrial and provident societies, building societies, State-controlled companies, companies controlled by certain foreign states or treaty-partner governments, and companies controlled by non-close companies.
• A resident company is also treated as close if, on a full distribution of its distributable income, more than 50 per cent of that income would be paid to five or fewer participators, or to participators who are directors.
• Shares held by trustees for an exempt approved pension scheme are treated as owned by a non-close company, provided the scheme is not set up mainly for the benefit of employees or directors of the company itself or a related company.