I am looking for additional guidance on what is a management organization under Code Section 414(m)(5). The proposed regulations issued in February 1983 are not helpful.
I have a situation where a partnership provides management services for my client and at least one other non-related corporation. My client would like to allow the employees of the partnership to participate in its 401(k) plan. Since my client and the management partnership are not part of a controlled group, it seems that a management organization that is an affiliated service group may be the only way to show that we do not have a "multiple employer plan". Does the fact that the management partnership performs services for other non-related entities cause it not to be an affiliated service group? If the partnership receives more than 50% of its revenue from my client, is that sufficient? What if it is less than 50%? Any guidance would be helpful.

You are not going to get a definitive answer on this one without a legal opinion. The management contract has to analyzed. One issue is who is the common law employer? If the the management group contract is strong enough to include that if the client leaves, the employees are retained by the management group and re-assigned elsewhere, then possibly the management group can sponsor a plan for those employees. Usually, this is not the case and ownership of the entities dictates who can sponsor a plan.