The term "legitimate business purpose" refers to a valid, lawful or acceptable reason for conducting a particular action or engaging in a specific activity. Full definition
Isn't there an exception for legitimate business purposes that would cover them? (law.stackexchange.com)
The cash buildup in life insurance policies held for legitimate business purposes is not counted towards the accumulated earnings limitation. (thinkadvisor.com)
A quick perusal of the internet seems to suggest that lawyers and other professionals in the area don't think that FLPs formed with legitimate business purposes have much to fear. (blogs.findlaw.com)