Beals Bros. Management Corp. - Page 7




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                         continuing basis, management                                 
                         functions for 1 organization (or                             
                         for 1 organization and other                                 
                         organizations related to such 1                              
                         organization), and                                           
                              (B) the organization (and                               
                         related organizations) for which                             
                         such functions are so performed by                           
                         the organization described in                                
                         subparagraph (A).                                            
                    For purposes of this paragraph, the term                          
                    “related organizations” has the same meaning                      
                    as the term “related persons” when used in                        
                    section 144(a)(3).                                                
                         (6) Other definitions.--For purposes of                      
                    this subsection--                                                 
                              (A) Organization defined.--The                          
                         term “organization” means a                                  
                         corporation, partnership, or other                           
                         organization.                                                
                              (B) Ownership.--In determining                          
                         ownership, the principles of                                 
                         section 318(a) shall apply.                                  
                         [Emphasis added.]                                            
               Respondent argues that the MGMT ESOP failed to meet the                
          minimum participation standards mandated by section 410 beginning           
          with its plan year ended June 30, 1987.  Respondent relies on               
          MGMT’s affiliation with MFG and the special rules contained in              
          section 414.  Generally, in the case of affiliated service groups           
          and controlled groups, section 414 requires that all employees of           
          the members of the group be treated as employed by a single                 
          employer for the purpose of the section 410 minimum participation           
          standards.  Sec. 414(b), (m).                                               






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