Ownership change in dental office 401-k Plan

[KevinMc]

If a dentist sells his practice and the new owner will have a new name (plan sponsor) and a new EIN, can the plan be amended to recognize a new trustee, plan name and EIN or must it be terminated and a new plan started? (the new owner would like to continue safe harbor contributions). Thanks for any help.

[Bill Presson]

I'm assuming the new owner bought assets and not stock. The answer is yes, the new owner can adopt the existing plan as the new sponsor.

[ESOP Guy]

The down side of this plan of action is if the prior dentist did something that disqualifed the 401(k) plan the new guy would be on the hook as the current sponsor if it is discovered at a later date. That is one of the reasons people don't take over someone else's plan many times. Most of the lawyers I know would advise let the old dentist close his plan and the new dentist start a new plan. Something to think about.