assets of company sold

[thepensionmaven]

We have a situation wherein the Plan Sponsor is in the process of selling the assets of the company, the employees will all terminated from seller payroll and hired by the purchaser. The seller made the SHNE contribution for all those employees through the date of their termination of employment.  The name of the plan has remained in the name of the sellers.

The sellers will be changing the name of the company and I assume will file corporate registration under the name of the new corp with respective EINs. 

The sellers will be the only employees in the new corp and will have W-2 income.  

Q- I assume termination resolution would be effective as of the date of sale, and would be in the name of the seller's corp?            In order to avoid any IRS communication (which, on prior experience is unavoidable), I assume Form 5500-SF for 2020 would be in the name of the new corp and Item 4 would show the name of the old corp with the old EIN?  We have had a lot of headaches in the past with IRS not looking at Item 4 on the 5500s and clients have received numerous LTRs and Notices asking for 5500s.

[Bill Presson]

Missing some info. If the sellers only sold the assets, why is there a new corporation and a new EIN? Doesn't make sense.

[Bird]

2 hours ago, thepensionmaven said:

The sellers will be changing the name of the company and I assume will file corporate registration under the name of the new corp with respective EINs. 

Suggest you un-assume and ask what they are doing.

[thepensionmaven]

Per accountant, name change only, same EINs.  Buyer keeping seller corporate name.

[Bird]

1 hour ago, thepensionmaven said:

Per accountant, name change only, same EINs.  Buyer keeping seller corporate name.

I'm assuming "EINs" (plural) means "EIN" (singular).  It's not a minor point.

This is not an uncommon situation.  The sellers can maintain the plan and make additional contributions based on their W-2 income.  They can terminate it if they want but the date of the sale is a red herring; doesn't matter.

There shouldn't be any problem with 5500 filings using the same EIN and a different company name.

[Bill Presson]

1 minute ago, Bird said:

I'm assuming "EINs" (plural) means "EIN" (singular).  It's not a minor point.

This is not an uncommon situation.  The sellers can maintain the plan and make additional contributions based on their W-2 income.  They can terminate it if they want but the date of the sale is a red herring; doesn't matter.

There shouldn't be any problem with 5500 filings using the same EIN and a different company name.

Agreed.