Any group of business, whether Sole-Proprietorships, Partnerships, or Corporations, if it is determined to be a Controlled Group, has to be treated as a single business entity for the purpose of applying many aspects of pension law. The determination of Controlled Group status is made based solely on ownership percentages.
(Another aggregation of employers that must be considered is Affiliated Service Groups, which are based more on common business activity rather than just common ownership.)
There are two kinds of Controlled Groups: a Parent-Subsidiary group or a Brother-Sister group, defined as follows:
Parent-Subsidiary group: parent owns
Controlling Interest: ≥ 80% of stock of subsidiary
Brother-sister group: 5 or fewer people own
Controlling Interest: ≥ 80% of interest in each business
Majority Common Interest: > 50% of interest taking into account each individual's common ("identical"/minimum) ownership in each and every entity
Notes:
a person with 0% interest in one of the businesses is not considered
Follow the links to review the language of the code defining Controlled Groups: IRC 414(b), which incorporates the language of 1563(a) (except for subsections 1563(a)(4) and 1563(e)(3)(C)).
Here are some case studies in articles from an attorney specializing in ownership and control questions.