Cargill Strengths Disadvantages

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Typically, closely held corporations are faced with limitations on the amount of investors that are accepted to be on board as business members. Additionally, closely held corporations are private enterprises which do not openly trade their stocks. There are various advantages and disadvantages of a closely held company from a tax reporting standpoint. Due to the organizations structure, the need for accountability for every dollar spent on failed attempts is not necessary. A major tax advantage is that the interest which is accumulated within the organization is transferrable. This sets the tone for a tax advantage to the owners. The transferability of said interest is highly recommended and accepted by the Internal Revenue Service which is on the federal scale and a vast number of states also recognizes this practice. In addition to interest, the ownership of the business is also transferrable once …show more content…
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

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