A subsidiary corporation of a partnership may establish a separate segregated fund (SSF) and use the name of the corporation in the title of the SSF. An acceptable abbreviation may also be used in the name of the SSF.
GMAC is a financial services corporation that has elected partnership status with the Internal Revenue Service (IRS). It is owned 49 percent by General Motors, Inc. and 51 percent by FIM Holdings LLC. FIM Holdings LLC is an investment consortium led by Cerberus FIM Investors, LLC, which is its sole managing member, and several corporate principals. GMAC owns a number of subsidiaries, one of which is GMAC Insurance Holdings, Inc., which intends to establish an SSF.
The Commission considered, but did not reach a conclusion by the required four votes, whether GMAC could pay the expenses associated with administering the SSF of its corporate subsidiary.
The SSF may include the name "GMAC LLC" in its official name and may use "GMAC PAC" as its abbreviation. Commission regulations require that the name of an SSF must include the full name of its connected organization. 11 CFR 102.14(c). Although the name of the connected organization is GMAC Insurance Holdings, Inc., Commission regulations do not require that an SSF established by a subsidiary include the name of its parent or another subsidiary.
Commission regulations also permit an SSF to use a clearly recognizable abbreviation or acronym by which the connected organization is known. In previous advisory opinions, the Commission has examined whether the abbreviations or acronyms give adequate notice to the public as to the identity and sponsorship of the SSF. The Commission concluded that the name "GMAC PAC" is permissible because it reflects the name of the SSF's connected organization and the parent of the connected organization.
AO 2007-15: Date Issued: October 19, 2007; length: 4 pages