Corporation Tax Act 2010 section 439

"Close company"

Section 439 defines what makes a company a "close company" for corporation tax purposes, based on two alternative tests relating to control by a small number of participators or their entitlement to assets on a winding up.

• A company is a close company if it is controlled by five or fewer participators, or by participators who are directors (Condition A — the control test)
• Alternatively, a company is close if five or fewer participators, or participators who are directors, would be entitled to the greater part of the company's assets on a winding up (Condition B — the assets test)
• When applying the assets test, rights held as a loan creditor are disregarded if doing so would mean the relevant participators would receive the greater part of the assets
• Certain types of company are specifically excluded from being close companies under separate provisions