Closely held shares refer to shares of a company that are held by a limited number of individuals, usually a small group of shareholders or a single entity. Unlike publicly traded companies whose shares are available for purchase and sale on the stock exchange, closely held shares are not freely traded or available to the general public.

In closely held companies, the ownership and control of the shares are concentrated among a select group of shareholders, often including founders, family members, or a small group of investors. This type of ownership structure allows for tighter control over the company's decision-making processes and operations.

Closely held shares are typically characterized by a lack of market liquidity, as there is a limited market for buying or selling these shares. Transactions involving closely held shares often occur through private negotiations and agreements among the shareholders.

Due to their limited availability and exclusivity, closely held shares can carry a higher value and offer certain advantages, such as increased privacy and flexibility in decision-making. However, they may also present challenges in terms of raising capital or exiting the investment, as the market for these shares is less transparent and accessible compared to publicly traded stocks.