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The plan is adopted by an employer, and only the income from that employer can be counted. So, if the sole prop adopts a plan, any income received from another employer, whether W-2 or K-1, doesn't count for the sole prop plan (assuming no 414(m), (n), or (o) issues - controlled entities). It's highly unlikely that the 2% ownership will allow him to adopt a plan for that entity, so he has only his sole prop plan and only his sole prop income to take into consideration.

For what it's worth, since it was set up as a multiple employer plan, I would check the multiple employer box and report the one company making 100% of the contributions. I think avoids any future issues when the next return is filed.