Another Affiliated Service Group question

[Guest Mike Spickard]

Having looked at the history of posts related to ASG issues, my scenario seems straightforward.

Dr. D owns 100% of JD Dental. Dr. R (an HCE) works as an employee of JD Dental. Dr. R wants to strike out on his own with the "blessing" of Dr. D.

Dr. D will let Dr. R go out on his own with no issues, but wants to sign Dr. R's new company to a 5-year contract to provide services to JD Dental and its patients. Dr R's new company (owned 100% by Dr. R) can do work for other companies, but likely will receive 100% of its revenues from JD Dental. Dr. R's revenue will come solely from working on JD Dental's patients, and no revenues will be related to management functions for JD Dental since Dr. D provides all of those.

Dr. D will not own any of Dr. R's new company. Dr. R has never owned any part of JD Dental.

1) is this an ASG? Since there is not one whit of common ownership, nor any management functions, I think not.

2) if not, can Dr. R set up a retirement plan for his new company without any potential coverage ramifications with JD Dental's plans?

[Belgarath]

IMHO, and assuming that the new company is truly independent, no attributed ownership through options, etc., and none of the employees are shared:

1. I agree.

2. Yes.