Subchapter S Corporations-A Voting Agreement Creating an Irrevocable Proxy Does Not Create a Second Class of Stock



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Texas Tech Law Review


Discusses whether the use of voting agreements disqualify an otherwise small business corporation from Subchapter S treatment in Parker Oil Co. The author concludes, because Subchapter S is used by such a large number of corporations, every effort should be made to clarify the governing rules to prevent hardships to the shareholders. The Parker decision has made the initial step by clarifying the role of voting agreements in small business corporations. The Commissioner should now acquiesce to Parker and revise the one class of stock requirement to permit the use of voting agreements.



S Corporations, Voting agreements, Small business, IRS, Internal Revenue Service, Parker Oil Co., 58 T.C. No. 95 (Sept. 21, 1972), Case note


4 Tex. Tech L. Rev. 426