The sale of shares in a closed corporation is similar to the sale of a sole proprietorship because:

Question

Quizplus · Accepted Answer

Both closed corporations and sole proprietorships do not have shares traded on the open market and do not require government approval for a transfer. However, determining a market value of the asset may be difficult for both types of businesses. While closed corporations have multiple shareholders, the sale of shares can be negotiated privately, unlike public corporations where transfers are often subject to legal restrictions. Duration is not a significant issue in this comparison.

The Sale of Shares in a Closed Corporation Is Similar