Controlled Group?

[figure 8]

A business owner owns 100% of his business. No employees.

This business also owns 40% of another business. This other business has employees. Neither business has a DB plan.

Questions:

1. Do these businesses form a controlled group?

2. Can the business owner set up an individual DB plan through his 100%-owned business?

My thoughts are that, no, these businesses do not form a controlled group. The ownership % would have to be at least 80% for that to be the case, but it's only 40%. And as a result, he can set up his own individual DB plan through his 100%-owned business.

Thoughts? Thanks in advance.

[figure 8]

Also, assume that the 100% owner is not related to anyone who owns the other 60% of the second business.

[jpod]

. . . and make sure the two businesses do not comprise an ASG under Section 414(m).

[figure 8]

Okay, thanks. Yea, I think determining whether there's an ASG is the key here. I overlooked that above. I'll have to figure that out.

I think the other questions above have pretty clear cut answers, if there is no ASG. I just want to make sure I'm not missing anything else.