What is the difference between a related organization and a controlled entity in Schedule R, Form 990?
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An organization that stands related to an organization that files Form 990 at any time during the tax year is called a related organization. The related organization generally relates itself with the filing organization in the form of a parent organization, subsidiary organization, brother/ sister organization, or a supporting organization.
 
The related organization includes nonprofit organization, stock corporation, partnership or limited liability company, trust, unit, or governmental organization entity.
 
Whereas a controlled entity is a type of a related organization defined under Code section 512(b)(13). According to the section, the entity includes subsidiaries that are more-than-50 percent controlled by the organization.

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