Rich Michaelson Magaliff, LLP
SPEAK WITH ONE OF OUR ATTORNEYS TODAY.
[et_pb_stop_stacking disabled_on=”on|on|on” _builder_version=”3.17.6″ disabled=”on” global_colors_info=”{}” _i=”1″ _address=”3.0.0.1″ /]
SPEAK WITH ONE OF
OUR ATTORNEYS TODAY.

Real World Solutions To Real World Challenges

Best Lawyers | Best Law Firms | U S News and World Report | 2016
Best Lawyers | Best Law Firms | U S News and World Report | 2017

R3M has been voted a Best Law Firm by US News & World Report and Best Lawyers

Best Lawyers | Best Law Firms | U S News and World Report | 2018
Best Lawyers | Best Law Firms | U S News and World Report | 2019
Best Lawyers | Best Law Firms | U S News and World Report | 2020
Best Lawyers | Best Law Firms | U S News and World Report | 2021
Best Lawyers - Lawyer Logo
logo-popup

Location

335 Madison Avenue, 9th Floor
New York, NY 10017

Toll Free: 877.373.6811
Fax: 212.913.9642
Map & Directions

close

Get Answers

We noted in a recent blog post the stated view of one business principal whose company was bought out by a closely held enterprise that the new ownership platform would better enable him as CEO to make decisions more firmly aligned with the company’s interests.

That individual was contrasting his new reality with what he said previously existed, namely, the regular intrusion of activist investors more focused on short-term profits than on long-term business viability.

“These guys show up, they’re renting the stock and they tell you what to do,” he noted in a business article. “[I]t’s not a positive way to have dialogue.”

Closely held companies do indeed have attributes that can minimize radical business moves over the short term and promote a sense of ongoing stability. They include these characteristics:

  • Limited number of shareholders
  • Stock that is publicly traded in a relatively controlled manner
  • Tendency of shareholders to maintain holdings for an extended period
  • Less chance for outsiders taking control, hostile takeovers and decisions that might reap immediate profits but harm an enterprise in future months or years

Although not always being the case, closely held companies are often marked by a controlling number of shares held by family members or other tightly connected individuals, with that reality helping to dampen material business dislocations.

The advisability of opting for a closely held company business model will of course depend on a number of complex and interrelated factors in any given case, as well as on the legal requirements set forth under applicable state laws.

An experienced business and commercial law attorney can provide further information and studied input on all matters relevant to the consideration of a closely held enterprise.