spinoff

[52626]

company A sold a portion of the entity to an unrelated company, this will not be a controlled group. the new company will keep the EIN and name. The only difference is the ownership.

1. Is there a time frame when the new company must transfer assets to their plan ( current the new employer does not have a plan)

2. can't the new company be a participating employer - Multiple Employer Plan

3. Can the 18 month transitional rule be used in this case, giving the new employer time to set up a plan and transfer the assets??

thanks

[rcline46]

new company will keep A's ein and name or their original ein and name?

yes they could be part of a MEP if company A allows it - that is dependent on the first question or course

They do not have to set up a new plan, the purchased employees just no longer have a plan - dependent on the first question.

there is no 18 month transitional rule applicable here if new company does not have a plan.