Goto Section: 1.991 | 1.993 | Table of Contents
FCC 1.992
Revised as of October 2, 2015
Goto Year:2014 |
2016
§ 1.992 How to calculate indirect equity and voting interests.
(a) The criteria specified in this section shall be used for purposes of
calculating indirect equity and voting interests under § 1.991.
(b)(1) Equity interests held indirectly in the licensee and/or controlling
U.S. parent. Equity interests that are held by an individual or entity
indirectly through one or more intervening entities shall be calculated by
successive multiplication of the equity percentages for each link in the
vertical ownership chain, regardless of whether any particular link in the
chain represents a controlling interest in the company positioned in the
next lower tier.
Example. Assume that a foreign individual holds a non-controlling 30 percent
equity and voting interest in U.S.-organized Corporation A which, in turn,
holds a non-controlling 40 percent equity and voting interest in
U.S.-organized Parent Corporation B. The foreign individual's equity
interest in U.S.-organized Parent Corporation B would be calculated by
multiplying the foreign individual's equity interest in U.S.-organized
Corporation A by that entity's equity interest in U.S.-organized Parent
Corporation B. The foreign individual's equity interest in U.S.-organized
Parent Corporation B would be calculated as 12 percent (30% × 40% = 12%).
The result would be the same even if U.S.-organized Corporation A held a de
facto controlling interest in U.S.-organized Parent Corporation B.
(2) Voting interests held indirectly in the licensee and/or controlling U.S.
parent. Voting interests that are held by any individual or entity
indirectly through one or more intervening entities will be determined
depending upon the type of business organization(s) in which the individual
or entity holds a voting interest as follows:
(i) Voting interests that are held through one or more intervening
corporations shall be calculated by successive multiplication of the voting
percentages for each link in the vertical ownership chain, except that
wherever the voting interest for any link in the chain is equal to or
exceeds 50 percent or represents actual control, it shall be treated as if
it were a 100 percent interest.
Example. Assume that a foreign individual holds a non-controlling 30 percent
equity and voting interest in U.S.-organized Corporation A which, in turn,
holds a controlling 70 percent equity and voting interest in U.S.-organized
Parent Corporation B. Because U.S.-organized Corporation A's 70 percent
voting interest in U.S.-organized Parent Corporation B constitutes a
controlling interest, it is treated as a 100 percent interest. The foreign
individual's 30 percent voting interest in U.S.-organized Corporation A
would flow through in its entirety to U.S. Parent Corporation B and thus be
calculated as 30 percent (30% × 100% = 30%).
(ii) Voting interests that are held through one or more intervening
partnerships shall be calculated depending upon whether the individual or
entity holds a general partnership interest, an uninsulated partnership
interest, or an insulated partnership interest as specified in paragraphs
(b)(2)(ii)(A) and (B) of this section.
(A) General partnership and other uninsulated partnership interests. A
general partner and uninsulated partner shall be deemed to hold the same
voting interest as the partnership holds in the company situated in the next
lower tier of the vertical ownership chain. A partner shall be treated as
uninsulated unless the limited partnership agreement, limited liability
partnership agreement, or other operative agreement satisfies the insulation
criteria specified in § 1.993.
:Note to paragraph (b)(2)(ii)(A): The Commission presumes that a general
partner of a general partnership or limited partnership has a controlling
interest in the partnership. A general partner shall in all cases be deemed
to hold an uninsulated interest in the partnership.
(B) Insulated partnership interests. A partner of a limited partnership
(other than a general partner) or partner of a limited liability partnership
that satisfies the insulation criteria specified in § 1.993 shall be treated
as an insulated partner and shall be deemed to hold a voting interest in the
partnership that is equal to the partner's equity interest.
(iii) Voting interests that are held through one or more intervening limited
liability companies shall be calculated depending upon whether the
individual or entity is a non-member manager, an uninsulated member or an
insulated member as specified in paragraphs (b)(2)(iii)(A) and (B) of this
section.
(A) Non-member managers and uninsulated membership interests. A non-member
manager and an uninsulated member of a limited liability company shall be
deemed to hold the same voting interest as the limited liability company
holds in the company situated in the next lower tier of the vertical
ownership chain. A member shall be treated as uninsulated unless the limited
liability company agreement satisfies the insulation criteria specified in
§ 1.993.
(B) Insulated membership interests. A member of a limited liability company
that satisfies the insulation criteria specified in § 1.993 shall be treated
as an insulated member and shall be deemed to hold a voting interest in the
limited liability company that is equal to the member's equity interest.
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Goto Section: 1.991 | 1.993
Goto Year: 2014 |
2016
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