The Model Business Corporation Act provides for small,closely held corporations to be organized and creates Subchapter S corporations with special benefits.

Question

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The Model Business Corporation Act provides a template for states to use in drafting their corporation statutes, but it does not create Subchapter S corporations. Subchapter S refers to a special tax designation provided by the Internal Revenue Code, which allows corporations to pass income directly to shareholders and avoid double taxation.

The Model Business Corporation Act Provides for Small,closely Held Corporations