Group under Code Section 414 or Independent

[TPA Bob]

5 individual real estate brokers have left an existing business  A and are going to work with new Company B (a national firm with offices in 35+ other cities).  Each of the 5 are establishing their own LLC and will receive a 1099 from Company B for commissions.   Each is responsible for their own expenses.  The 5 will not own any of Company B.

Company B (a national firm) will have an office and staff with 3 administrative type employees.  These employees will be eligible for Company B's retirement plan.

One of the LLC members wants to establish a plan for her and not include any of the other LLCs or the 3 employees of Company B.  It is common in the real estate business for the brokers to be independent.

After a review of the management service group rules I do not see a problem.  

Any thoughts would be appreciated.

 

[CuseFan]

RE Agents, if working solely on commission under the supervision of an agency and not paid with respect to hours worked, are definitely considered self employed and may establish retirement plans with respect to that income.