Partial Acquisition of Company - Merge?

[khn]

A large company is acquiring 60% ownership of a small firm. The firm is keeping their own EINn and will operate as an indenpendent subsidiary.  Employees will remain employees of the small firm but will be put on the benefits of the large company. Can the small firm's 401(k) be merged into the larger company's plan or does it need to stay separate? Are there any pitfalls to merging it into the larger plan?

[MoJo]

If merged (or even if not merged, but sub's employee's participate in the "parent's" plan) and if it's not a controlled group - can't tell without knowing more about the owners - then it's a MEP, with all of the attendant issues around administering a MEP.  It'd be a closed MEP - but still a MEP.  Check with the recordkeeper about their capabilities to handle one....