Management ASG

[Guest djsimonetti]

A's only business is the performance of management functions for B. A (which has one HCE and no NHCEs) is not related to B which has dozens of NHCEs). This is a management ASG under 414(m)(5). In order to avoid ASG status, A begins performing management functions for C, a wholly owned subsidiary of A which is also not related to B. Assuming that the services performed for C are legitimate and that they represent a sufficiently high percentage (whatever that may be) of A's revenues, it appears that A and B will not be a management ASG because A will not perform such functions for (1) one organization (since it does so for B and C) or (2) one organization and others related to the one organization (since B and C are not related). In effect, A can end run 414(m)(5) by creating a second customer for its services. The proposed regs might have stopped this maneuver, but have been withdrawn. Am I missing something?