Which type of corporation restricts ownership to a maximum of 20 individuals and has limitations on stock transfer?

The type of corporation that restricts ownership to a maximum of 20 individuals and imposes limitations on stock transfer is known as a close corporation. Close corporations are designed to be owned by a limited number of individuals, usually family members or a small group of people, allowing for a more controlled and private management structure. This arrangement facilitates stronger internal governance and maintains a degree of confidentiality that is not typically found in larger corporations.

In close corporations, restrictions on stock transfer help maintain the composition of ownership, ensuring that shares are not freely traded or sold to individuals outside the existing group of owners. This is crucial for maintaining the close-knit relationships and trust that usually characterize such businesses.

Conversely, domestic corporations operate in the country of incorporation but do not inherently come with ownership restrictions. Foreign corporations are those incorporated outside of the jurisdiction in question, and they typically also do not have restrictions based on ownership numbers. Open corporations, on the other hand, permit shares to be traded publicly and do not impose limits on ownership or transfer, which contrasts significantly with the nature of close corporations.