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The choice by a small corporation to be treated under “subchapter s” by the internal revenue service, which allows the corporation to be treated like a partnership for taxation purposes. this may provide the benefit of passing losses (particularly in the early development of the business) to the stockholders. technically the term “subchapter s corporation” is a misnomer since it is a normal corporation except for the election (choice) which is filed on a form provided by the irs normally immediately after incorporation, which election can be withdrawn before the beginning of a future taxable year. this election is usually prepared and filed with the irs by the company’s accountant and not the incorporating attorney.

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