Alabama Code 40-18-170. Circumstances under which corporation treated as partnership; “two-percent shareholder” defined
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Terms Used In Alabama Code 40-18-170
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
- year: means a calendar year; but, whenever the word "year" is used in reference to any appropriations for the payment of money out of the treasury, it shall mean fiscal year. See Alabama Code 1-1-1
For purposes of applying the provisions of this chapter which relate to employee fringe benefits, the Alabama S corporation shall be treated as a partnership, and any two-percent shareholder of the Alabama S corporation shall be treated as a partner of such partnership. The term “two-percent shareholder” means any person who owns, or is considered as owning in accordance with 26 U.S.C. § 318, as in effect from time to time, on any day during the taxable year of the Alabama S corporation more than two percent of the outstanding stock of such corporation or stock possessing more than two percent of the total combined voting power of all stock of such corporation.