# Close corporations

`kaal:entity:close-corporations`

**Status.** derived

This node is assembled mechanically from the 4 claims that carry the concept tag `close-corporations`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

4 claims across 1 works, 2017 to 2017.

**2017**

- [3017612-007](https://wulfkaal.github.io/claims/3017612-007) [normative/argued] -- Because public and close corporation shareholders differ materially in bargaining power, close corporation shareholders should be granted greater flexibility to order their affairs by agreement.
  > Courts and academics have acknowledged there is a significant difference between shareholders of public and close corporations, specifically in regards to bargaining power, such that close corporation shareholders should have greater flexibility to align their affairs as they see fit.
  Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612
- [3017612-008](https://wulfkaal.github.io/claims/3017612-008) [condition/evidenced] *(failure mode)* -- A shareholder agreement authorized under MBCA Section 7.32 ceases to be effective once the corporation's stock is listed on a national securities exchange or regularly traded in a dealer maintained market, so the going public event terminates the arrangement.
  > agreement ceases to be effective when the stock of the corporation is listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association.
  Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612
- [3017612-012](https://wulfkaal.github.io/claims/3017612-012) [mechanism/argued] -- Shareholder agreements matter more in closely held corporations because minority holders have sunk substantial time or capital into the enterprise yet cannot exit through sale, since their shares lack a ready market.
  > Minority shareholders in a closely held corporation are likely to have invested substantial time or capital in the enterprise, but those dissatisfied with the corporation's operation cannot sell their shares easily because the shares are not readily marketable.
  Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612
- [3017612-020](https://wulfkaal.github.io/claims/3017612-020) [empirical/evidenced] -- Courts have recognized an enhanced fiduciary duty among participants in closely held corporations, holding that majority shareholders owe fiduciary duties not only to the corporation but to minority shareholders as a class.
  > The distinct needs of close corporations is also shown as courts have recognized an enhanced fiduciary duty among participants in closely held corporations.64 Courts have held that majority shareholders have a fiduciary duty not only to the corporation but also to minority shareholders as a class
  Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/close-corporations.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.