Family Attribution

Ownership is attributed between parents and adult children if the ownership % of one is greater than 50%.

https://www.irs.gov/pub/irs-tege/epchd704.pdf page 12

So Dad owns 100% of a business with 50 employees.  He starts a 50/50 partnership with his son and takes some clients there and is smart enough to keep the entities very separate in the clients they serve, maybe even a different line of business.

Assuming the comp is there to support it, Dad has big qualified plan contributions in the side business and since it's less than 80% common ownership, it's not a controlled group and he doesn't have to cover his 50 employees.  This seems like a scenario ripe for abuse.  Where's the catch?

In a situation where there is TRULY no CG or ASG, how is it abusive? I'm not sure I quite understand the question.