Controlled Group Considerations

[SMB]

I have a pending controlled group situation in the offing and need to know just what issues need to be considered and/or addressed (this is uncharted territory for me).

The situation is thus: Corporation A and Corporation B are forming Partnership C (a partnership of Corporations A and B).

Corporation A currently sponsors a DC Plan. Corporation B currently sponsors a DB Plan.

Some employees of Corporation B will be splitting their time between Corporation B and Partnership C. Partnership C will likely also be hiring employees in addition to those individuals being "split" with Corporation B.

Don't even know where to start! Any any all input most appreciated.

[SRM]

What is the ownership makeup of Corporation A and Corporation B? What will be the ownership makeup of Partnership C?

[SMB]

Reply to SRM:

Corporation A is 100% owned by Dentist A. Corporation B is 100% owned by Dentist B. Corporations A and B will each own 50% of the new partnership.

[SRM]

I do not believe that you have a group under common control since neither dentist has a controlling interest (80% ownership) in the partnership.

There may be an affiliated service group if the partnership and/or the corps. regularly perform services for the each other or are associated with the other in performing services for third parties.

There are also some special rules related to the treatment of shared employees (determination of hours and compensation considered for the plans).