Controlled group becomes unrelated mid year

[mattmc82]

Company A and Company B are part of a controlled group that sponsor a safe harbor profit sharing plan. Both companies are sold midyear to unrelated. Assume acquiring entities do not own any other companies. Can Company B create their own plan midyear AFTER the transaction? I know transition rules provide some relief for mergers, but I am having trouble finding guidance on when a controlled group of employers becomes unrelated midyear. the safe harbor provisions makes me lean towards that this has to be a MEP until years' end. Thoughts?

[Mike Preston]

Thoughts:

1) Sale of stock or assets?

2) Hard to believe it wouldn't be a 410b6C transaction.

[mattmc82]

stock sale. I would assume it fall under significantly changed

[Mike Preston]

Interesting. But the significant change would involve something other than company b adopting an identical plan.