Controlled groups of corporations were considered in the Internal Revenue Code long before ERISA. ERISA incorporated the controlled group rules into its framework (IRC §414(b)) to ensure that employers did not use multiple corporations to escape its coverage and nondiscrimination requirements. ERISA also introduced the concept of trades or businesses under common control [IRC §414(c)] to move the controlled group framework to unincorporated entities. Over time, other employee benefit nondiscrimination rules have been amended to refer to these ERISA rules.
This chapter will introduce the role of controlled groups and the various types of controlled groups. Subsequent chapters will refine the picture, as they address attribution rules (Chapter 7), excluded stock (Chapter 8), the component member rules (Chapter 9), the effects of controlled group status (Chapter 10), and changes in controlled groups (Chapter 11). Common control will be addressed in Chapter 12.
 | Q 6:1 Why did Congress originally devise the controlled group rules? |
| Q 6:2 What is a controlled group of corporations? |
| Q 6:3 What is a parent-subsidiary controlled group? |
| Q 6:4 What is a brother-sister controlled group? |
| Q 6:5 What is a controlling interest for purposes of the brother-sister controlled group rules? |
| Q 6:6 What is effective control for purposes of the brother-sister controlled group rules? |
| Q 6:7 Are all individual, estate, or trust shareholders considered for the controlling interest and effective control tests? |
| Q 6:8 Can controlling interest be based on voting power and effective control based on stock value (or vice versa)? |
| Q 6:9 What methodology do you follow in determining if a brother-sister controlled group exists? |
| Q 6:10 Can there be a brother-sister group with more than two members? |
| Q 6:11 What is a combined group? |
| Q 6:12 What is an insurance group? |
| Q 6:13 Are facts and circumstances, such as the type of business involved, considered in determining whether a controlled group exists? |
| Q 6:14 How is stock ownership determined for purposes of the controlled group rules? |
| Q 6:15 How is voting power determined in determining if a controlled group exists? |
| Q 6:16 How are stock values determined? |
| Q 6:17 Can two corporations be part of a controlled group if they do not exist at the same time? |
| Q 6:18 What other issues affect controlled groups? |