Shareholding continuity governs loss carry-forward for closely held companies, subject to start-up relief and specified restructuring exceptions.

Earlier business losses of a closely held company may be carried forward only where beneficial ownership of at least 51% voting power continues from the loss year to the relevant tax year. Eligible start-ups may use losses despite failure of this voting-power test if all loss-year shareholders continue to hold their shares and the losses arose within the first ten years from incorporation. Exceptions apply to specified changes resulting from death, gifts to relatives, qualifying foreign restructurings, approved resolution plans, qualifying relocations, and strategic disinvestment subject to continuing holding requirements.

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