Facts (names changed to protect the innocent)
--John owns Corporation A- 100 %- no employees
---Jim owns Corporation B- 100%- 1 employee who works more than 1,000 hours and had been with company for five years
---John and Tom owns Partnership-C- 50% each

---John established a profit sharing plan for Company A

Questions.

1) Must Jim be included in the profit sharing plan established by John for company A?
2) Must the employees of Company B be included in the profit sharing plan established by John for company A?

...if yes-any exceptions?
Thanks very much
Jane

No controlled group exists as Jim has no ownership in corporation A and John has no ownership in corporation B. Therefore, neither Jim or the employee should have to be covered in Corporation A's plan.

Jane, could there be an affiliated service group?

Not so fast on the controlled group ruling. One crucial piece of information is missing. Are John and Jim father and son and, if so, is the son less than 21 years old? Under the controlled group attribution rules, ownership held by a minor child is attributable to the parent.

Or maybe Jim has options to purchase stock in John's company or vice versa, which too makes it a controlled group.

Or maybe Jim is a woman and John is married to Jim. Attribution would apply and it would be a controlled group. John could be the woman too.

Or maybe John killed Jim and assumed his identity. Being the same person, there is clearly a controlled group here.

Or maybe.....

Point is you can only go with what information is given. You can do a whole lot of maybes. Extremely doubtful John is Jim's son or vice versa.

What is not doubtful is the need for some insurance! Don't you care about your family?

Unless its a management group, you almost have to think that there is some kind of relationship between Jim & John or the question doesn't make sense.

I was tempted to ask if Jim and John are married! Not that it would matter for ERISA purposes though.

Often, you can tell how much someone knows about a topic by the way they ask the question. A good example is how I asked this question- you can tell I know nothing .

They are not married or otherwise related...and no ASG- I think sicne they share absolutely no resources or services .
Your responses have been extremely helpful and educational. I am more enlightened and I impressed the customer – his attorney agreed with my response.

Thanks a zillion guys