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and Search2000 were corporations during 1995. Navis held itself
out as a corporation. Navis was engaged in limited business
activity during 1994, as reflected in a bill from a law firm,2 a
long-distance phone bill, and several shipping receipts. Navis
remained a California corporation until its corporate status was
suspended.
On July 21, 1995, Search2000 held a board of directors
meeting, and the minutes of that meeting state in part:
WHEREAS, the Corporation desires to accept the offer of
Navis Communications, a California Sole
Proprietorship,[3] to sell all of its ownership rights
to business plans and intellectual property defined as
WorkWorld and PowerAgent.
RESOLVED, that the Corporation purchase all rights to
business plans and intellectual property defined as
WorkWorld and PowerAgent for a consideration of
$300,000.00.
On July 21, 1995, Search2000 created the following
instrument in connection with the alleged purchase by Search2000
of business plans and intellectual property, defined as WorkWorld
and PowerAgent, which were owned by Navis:
2The bill indicated that the law firm, Higgs, Fletcher &
Mack, of San Diego, California, performed services related to the
incorporation of Navis Communication.
3We note that petitioners stipulated that Access was
incorporated under the laws of the State of California and that
it later changed its name to Navis. Petitioners stipulated that
Navis was a corporation in 1995. We shall treat Navis as a
corporation. Petitioners have not provided this Court with
evidence that Navis elected to be treated as a subchapter S
corporation under sec. 1362(a).
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