Final answer:
A closely held or family-owned business often takes the form of a private company, which can be a sole proprietorship, partnership, or a private corporation. These structures are conducive to hands-on management by the owners and can vary in size from small firms to large enterprises with significant sales.
Step-by-step explanation:
A popular form of ownership for closely held and family-owned businesses is a private company. This can manifest as a sole proprietorship when owned and operated by an individual, or a partnership when run by a group. Another form is a private corporation, which is similar to a public company but without publicly issued stock. For instance, a small law firm managed by a single individual would represent a sole proprietorship, even if they employ other lawyers. In comparison, a larger law firm owned by multiple partners operating in a joint capacity would be considered a partnership. These entities offer a structure that is amenable to family business models, facilitating easier and more direct management and control.
When we discuss larger enterprises with significant annual sales, examples include Cargill, Mars, and Bechtel, which, despite their size, remain as private corporations. Such companies, while privately held, can still reach substantial scales. It is important to understand that when a company chooses to sell stock that can be bought and sold by financial investors, it becomes a public company. This signifies a shift in ownership to the shareholders, who elect a board of directors to oversee executive management, an aspect of corporate governance.