There is also the complexity of the passive activity tax rule. Passive activity dictates that any loss that the company encountered within the calendar year which exceeds earnings from passive activities cannot be reported that year.
An example of a closely held corporation is Cargill which supplies food, farming, monetary and manufacturing products around the world. Depending on the circumstance many closely held corporations are smaller businesses. In retrospect Cargill is a large corporation that employs over 140,000 individuals which are situated in over 70 countries (Reilly, 2011).
Essentially, closely held corporations because are small family owned companies are less likely to change locations easily. Due to their structure, closely held corporation maintain a closer and intimate relationship with their employees which also supports the small family bond that they