Which of the following is the basic difficulty of owning a minority interest in a closely held corporation?
A) There is no ready market for the minority stock should a shareholder desire to dispose of it.
B) Stockholders with a minority interest have no rights in a closely held corporation.
C) Buy and sell agreements to own a minority interest are not allowed in a closely held corporation.
D) Minority shareholders have unlimited personal liability for the obligations of a closely held corporation.
E) Minority shareholders risk losing more than their investment amount.

Question

Quizplus · Accepted Answer

The basic difficulty of owning a minority interest in a closely held corporation arises from the fact that there is no ready market for the stock should the shareholder desire to dispose of it. Of course, if there is a valid buy and sell agreement, then there is a market for the stock. Thus, as with partnerships, buy and sell agreements are absolutely essential in closely held corporations.

Which of the Following Is the Basic Difficulty of Owning