cammy9

Thanks, Mike. It just seems strange that someone who owns 5% of the subsidiary and none of the parent company would have a higher ownership percentage than someone who owns even a small percentage of the parent company. But I guess those are the rules!

Our 401k plan has 2 employers in it (the parent company owns 80% of the subsidiary) and is considered a controlled group. When determining 1% and 5% owners, would you consider each company separately or just consider the parent company? The example is- If person A owns 2% of the parent company and person B owns 6% of the subsidiary, is person A a 1% owner and person B a 5% owner? Obviously, person A also owns a percentage of the subsidiary because the parent company owns 80% of the subsidiary but not sure if you would figure out this percentage and add the 2 together? Or something else?