1806002 Informal Interpretation

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Sheinberg, Samuel I.
From:
Sent: 	Thursday, June 28, 2018 9:38 AM
To: 	Walsh, Kathryn E.; Berg, Karen E.; Shaffer, Kristin; Sheinberg, Samuel I.; Whitehead,
Nora; Cummings, Stephanie
Subject: 	FW: Rule 801.1 Questions - Unincorporated Entity
From: Carson, Timothy
Sent: Thursday, June 28, 2018 9:37:35 AM (UTC-05:00) Eastern Time (US & Canada)
To:
Cc:
Subject: RE: Rule 801.1 Questions - Unincorporated Entity
Confirmed.
From:
Sent: Wednesday, June 27, 2018 12:28:56 PM (UTC-05:00) Eastern Time (US & Canada)
To:
Subject: Rule 801.1 Questions - Unincorporated Entity
I would appreciate your confirmation of the following conclusions:
Rule 801.1(b) provides that “[t]he term control … means: … (ii) in the case of an
unincorporated entity, having the right to 50 percent or more of the profits of the entity,
or having the right in the event of dissolution to 50 percent or more of the assets of the
entity.” Under Rule 801.1(b)(2), control means "[h]aving the contractual power
presently to designate 50 percent or more of the directors of a for-profit or not-for-profit
corporation.
If a limited liability company, which is an "unincorporated entity" under the HSR rules,
has single member who the right to designate 50 percent or more of the LLC's Board of
Directors equivalent, that has no bearing on the "control" definition under 801.1(b).
Also, if a limited liability company elects to be treated as a C corporation for tax
purposes, that does not change the applicable test for "control" under the HSR rules
either.
Thank you in advance for your assistance and please feel free to contact me if you
have any follow up questions.
Regards,

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