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SIMPLE plan & ownership change


Guest bmurphy61
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Guest bmurphy61

Existing company with SIMPLE plan came under new ownership as of 1/1/08. Corporate name & EIN changed but DBA remained the same. Can new owner simply amend & restate plan or do they need to start a brand new SIMPLE?

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  • 2 months later...

If the stock was bought, it would appear to be the same company with a new name. Therefore, the existing plan would seem to be intact. Do the facts, instead, indicate that a new entity was formed?

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So you are saying that it is the same corporation (with different owners) that also underwent a name change with the Secretary of State. The existing plan should suffice assuming it to be current. The name of the plan can be changed by an amendment (and notification to employees, see plan provisions) and the accounts reregistered at the sponsors (by sending them the revised articles of incorporation). Keep in mind, the new owners, if employees, have to meet the plan's eligibility provisions.

In the partnership world, the IRS generally views as change in control (more than 50%) as creating a new entity.

Hope this helps.

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