We have a Client (LLC) who manages several properties. The first property is family owned of which the client individually owns 8%. He receives 72% of the management income from this property. He also owns 8% of the other properties (collectively owned through LPs). He receives the rest of the income from these.

In addition, he owns 48% of a Bldg supply business which is housed in some of the properties that are mentioned above.

The bldg supply business has a qualified plan; the others do not. From reading Derrin Watson's book, it does appear that the management function exists. However, the LLC should still be able to set up a SEP or individual 401k plan. Are we interpreting this correctly?