I was wondering if a controlled group existed in this situation. I wanted toi understand this before I moved on to the ASG rules. The facts are set forth below:
Corporation A - 91% owned by ESOP (all shares allocated to Individual A, sole participant in ESOP) and 9% to Individual A.
Corporation B - 100% owned by Individual A, no employees except Individual A.
Corporation C - 100% owned by an irrevocable stock trust, no employees except Individual A
LLC - owned 51% by Corporation B and 49% by a truly unrelated 3rd party. Several employees work for LLC.
I guess I have two questions.
If 91% of stock in Company A is held in an ESOP, but allocated to A's account, is A treated as owning 9% of Company A or 100% of Campany A. I think the answer is 9%.
Are the employees of A required to be considered in determining if ESOP meets coverage and participation tests? I think the answer is no, as only 51% of the LLC is owned by A.
Thanks in advance for your comments.
Ed