© 2022 All Rights reserved WUSF
News, Jazz, NPR
Play Live Radio
Next Up:
Available On Air Stations

Supreme Court Ruling Draws Attention To Business Lingo


The U.S. Supreme court ruled yesterday that the owners of closely held for-profit corporations, like Hobby Lobby, the chain of stores that brought the case, do not have to cover FDA-approved contraceptives in their employee health insurance.


In this decision, the words closely held stood out. What does closely held actually mean? While the IRS offers a long technical definition, we wanted a simpler one.

JOHN COFFEE: Closely held is a frequently used term in corporate law. And it essentially means that the company is something of an alter-ego for its shareholders.

GREENE: John Coffee is director of the Center on Corporate Governance at Columbia University Law School.

COFFEE: I would say there are three characteristics - one, a limited number of shareholders with no public trading in the shares. There will be no listing on a stock exchange. Two, there will be a large overlap between the managers and the shareholders. That is, you don't just have an investment in this company, you have a job and an investment. You're doing multiple things. And three, there's usually a high overlap between the shareholders and the directors. So we have a closely held company, meaning one in which there are multiple relationships and usually some interlinings among the shareholders.

MONTAGNE: A closely held company can be anything from the 16,000-employee Hobby Lobby chain, to your local corner grocery store. Transcript provided by NPR, Copyright NPR.

WUSF 89.7 depends on donors for the funding it takes to provide you the most trusted source of news and information here in town, across our state, and around the world. Support WUSF now by giving monthly, or make a one-time donation online.