What characterizes a corporation where board vacancies are filled only by current board members?

A corporation where board vacancies are filled only by current board members is known as a close corporation. This type of corporation typically has a limited number of shareholders, and the control of the corporation is often maintained within a small group, which can include family members or a tight-knit group of individuals.

In close corporations, there are often restrictions on the transfer of shares, which helps to ensure that ownership and management remain closely held. The fact that only current board members can fill vacancies reflects the intent to keep the governance structure within a predetermined and familiar group, reinforcing the close-knit nature of the corporation.

Other types of corporations, such as open corporations, generally have a broader structure allowing for the public sale of shares and more diverse boards. A corporation sole is specifically designed for a single individual, usually in a religious capacity, and does not involve a board in the same way. An eleemosynary corporation is a nonprofit organization established for charitable purposes, which may not follow the same governance structures as a close corporation. Thus, the unique characteristic of filling board vacancies solely by current board members is a defining feature of a close corporation.