Prime Benefits
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Manager/Supervisor of Benefits and Payroll Compensation Virginia Farm Bureau
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Southern Pension Services
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Defined Contribution Plan Administrator Pension Investors Corp of Orlando Inc
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Advanced Plan Designs, LLC
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Pension Rights Center
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Carpenter Morse Group
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Howard Simon & Associates
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Small NY Actuarial TPA Firm
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Definiti
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Southern Pension Services
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Question 274: A guy owns 100% of a construction company: "LargeCo." Then he forms another company (an "S" corporation for tax purposes) named "SmallCo," which leases equipmnent and real estate to LargeCo. He owns 79.9% of SmallCo; the other 20.1% is owned by an unrelated party. Now SmallCo installs a qualified plan that covers only SmallCo employees. Does the plan have to cover the employees of LargeCo? |
Answer: Are the two companies a controlled group for qualified plan purposes? No. 79.9% common ownership is not 80% common ownership. |
Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.
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