Common use of When Effective Clause in Contracts

When Effective. If an election ter- minates because of a specific event that causes the corporation to fail to meet the definition of a small business corporation, the termination is effec- tive as of the date on which the event occurs. If a corporation makes an elec- tion to be an S corporation that is ef- fective beginning with the following taxable year and is not a small busi- ness corporation on the first day of that following taxable year, the elec- tion is treated as having terminated on that first day. If a corporation is a small business corporation on the first day of the taxable year for which its election is effective, its election does not terminate even if the corporation was not a small business corporation during all or part of the period begin- ning after the date the election was made and ending before the first day of the taxable year for which the election is effective.

When Effective. If an election ter- minates because of a specific event that causes the corporation to fail to meet the definition of a small business corporation, the termination is effec- tive as of the date on which the event occurs. If a corporation makes an elec- tion to be an S corporation that is ef- fective beginning with the following taxable year and is not a small busi- ness corporation on the first day of that following taxable year, the elec- tion is treated as having terminated on that first day. If a corporation is a small business corporation on the first day of the taxable year for which its election is effective, its election does not terminate even if the corporation was not a small business corporation during all or part of the period begin- ning xxxx after the date the election was made and ending before the first day of the taxable year for which the election is effective.