Is it a prohibited transaction?

[Guest And another thing ...]

My company is considering engaging a financial advice provider for our 401(k) plan. We are considering a provider that we own a small part of (it could be around 10%). Would it be a prohibited transaction to hire that provider?

[Guest Bud]

At some level of ownership, your company and the service provider would be considered one entity. At that point, the service provider would be a party in interest like the company. 10% of a service provider may be enough for it to be a party in interest. You should divest or use another provider.