Another Controlled Group Issue

[dmb]

I have a client who is 100% owner of two corps (A and B). I have been TPA for Corp A's X-tested PS plan for the past four years. While preparing the 9/30/04 contribution calculation I have been informed that there exists Corp B, which was formed in April of 2002 and said Corp B has a 401k plan. There are a few employees that work for both Corps, but i am told that the common employees do not participate in the 401k plan. There is one employee who worked for Corp A until June of 2002 and then moved to Corp B. I'm trying to figure out if i have issues for the 9/30/03 plan year. It sounds like i do. I thought there may be a two or three year grace period when a new controlled group issue arises, is that true?? Thanks.