Controlled Group - Voting vs. Non-voting

[MGOAdmin]

How are voting shares and non-voting shares treated when figuring out controlled group issues.

Are only the voting shares considered? Are the total shares combined for consideration? Do you compare all the voting shares seperately from the non-voting shares?

Any help on this would be appreciated.

[austin3515]

From 1563(a)

a) Controlled group of corporations

For purposes of this part, the term “controlled group of corporations” means any group of—

(1) Parent-subsidiary controlled group

One or more chains of corporations connected through stock ownership with a common parent corporation if—

(A) stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of stock of each of the corporations, except the common parent corporation, is owned (within the meaning of subsection (d)(1)) by one or more of the other corporations; and

[MGOAdmin]

So you either look at just the voting stock or you consider all of the stock.

What happens if by using just the voting stock it is controlled, but using all the stock is not, or vice versa?

if it is controlled using one of the options, does that mean it is controlled?

[austin3515]

(A) stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of stock of each of the corporations, except the common parent corporation, is owned (within the meaning of subsection (d)(1)) by one or more of the other corporations; and