Definition of an officer

[Guest Pat Metallic]

In determining who a key employee is, what is the definition of an officer?

[Guest merlin]

It's a facts and circumstances definition. Someone with the title but no authority is not an officer, someone who has the authority but no title would be. What authority? Someone who can hire/fire, authorize/sign ckecks, bind the company to a particular course of action,e.g. set prices or fees. I'm sure there are other measures but these are things I look for.

[Guest Pat Metallic]

Thank you for confirming what I thought but could not readily find in text.

[david rigby]

Actually, it is in writing. See Q&A's T-13 and T-15 in the top heavy regs. 1.416-1.

[Guest UKH]

This is directly from the Top Heavy Regs 1.416-1 (Q & A)

Q-13. For purposes of defining a key employee, who is an officer?

A-13. Whether an individual is an officer shall be determined upon the basis of all the facts, including, for example, the source of his authority, the term for which elected or appointed, and the nature and extent of his duties. Generally, the term officer means an administrative executive who is in regular and continued service. The term officer implies continuity of service and excludes those employed for a special and single transaction. An employee who merely has the title of an officer but not the authority of an officer is not considered an officer for purposes of the key employee test. Similarly, an employee who does not have the title of an officer but has the authority of an officer is an officer for purposes of the key employee test. In the case of one or more employers treated as a single employer under sections 414(B), ©, or (m), whether or not an individual is an officer shall be determined based upon his responsibilities with respect to the employer or employers for which he is directly employed, and not with respect to the controlled group of corporations, employers under common control or affiliated service group.

A partner of a partnership will not be treated as an officer for purposes of the key employee test merely because he owns a capital or profits interest in the partnership, exercises his voting rights as a partner, and may, for limited purposes, be authorized and does in fact act as an agent of the partnership.

[david rigby]

Or read the regs. directly: http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html