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To: Charles Tutt who wrote (47250)	2/6/2002 7:06:14 AM
From: JDN	Read Replies (1) \| Respond to of 64865

Dear Charles: Your question sounds simple BUT in todays accounting world NOTHING is simple anymore, thats the problem. Basicall, you must consolidate all financials where you have CONTROL. If the agreements are silent you are deemed to have control if you own over 50% of the equity. HOWEVER, it is possible through management agreements and the like to actually have control with less then 50% or not to have control with more than 50%. Now, remember I have been out of the loop for 11 years buts thats what my foggy memory remembers. JDN

To: Charles Tutt who wrote (47250)	2/6/2002 8:25:32 AM
From: rudedog	Respond to of 64865

Charles - that's part of Texas law. A common mechanism for reducing franchise tax is to have an LLP which is owned by a small corporation, usually an LLC. The LLC owns 3% of the LLP and so shows revenue and profit which is 3% of the LLP. but they are the only partner with control. Franchise tax falls under the minimum unless the LLP makes millions. And of course the LLC does not have to consolidate the LLP financials since they only own 3%.