Can Husband / Wife with separate businesses (no employees) set up 1 plan

Wife has an LLC with no employees.  Husband has an LLC with no employees. Both own 100% of their own LLCs.  The Wife's LLC pays the Husband's LLC.  It is not clear if the Husband has any other source of income in his LLC.  They both would like to set up a solo 401k plan.  Do they need 2 separate plans or could both LLCs adopt the plan and only set up one plan? 

They are likely a control group so one plan with each LLC adopting should be fine. Even if not a CG they could do that as a multiple employer plan. However, if the desire is to use a vendor's solo-k product, need to make sure it accommodates whatever structure/LLC relationship you have.

Thank you.  We are using our Adoption Agreement so there is no issue with the structure.  We just wanted to confirm that one document for the Adopting entities would be fine and there is no need for 2 documents / 2 separate plans.

6 hours ago, CuseFan said:

However, if the desire is to use a vendor's solo-k product, need to make sure it accommodates whatever structure/LLC relationship you have.

Maybe I'm just being picky.  If the vendor uses the term "solo-K", is it time to find another vendor?

4 hours ago, Paul I said:

maybe we should refer to owners only plans as "OOPs"

Absolutely perfect!

Recognizing the practical limits of language, there can be differences between a businessperson’s consumer-facing or intermediary-facing sales label and terms or expressions a practitioner might use.

And even law-defined or technical terms can have aspects of imprecision, misdescription, or confusion.

I remember wincing when lawyers used “profit-sharing” to describe a nonelective contribution of a charitable organization that by law cannot have a profit to share with anyone. Even if that usage might have followed relevant tax law, I wouldn’t use it with my client’s customers because it would only confuse them. Perhaps especially if the employer provided a contribution for a period in which the organization had negative income.

Or imagine a retirement plan in which no employee is a participant and hundreds of partners are participants. According to the executive agencies’ Form 5500 instructions, that is a one-participant plan.

For the arrangement many people call a “self-directed brokerage account”, why do we say self-directed? When a plan that provides participant-directed investment limits a directing participant’s, beneficiary’s, or alternate payee’s investment alternatives to designated investment alternatives is that not self-directed by the individual? And if what we mean is an antonym or other-than of a plan’s designated investment alternatives, should we call it a Nondesignated Investment Alternatives Account?

BenefitsLink neighbors could go on with many illustrations about how difficult it is to invent a short phrase that perfectly describes what fits a concept, rule, or arrangement.

On 1/29/2026 at 11:03 AM, DDB BN said:

Thank you.  We are using our Adoption Agreement so there is no issue with the structure.  We just wanted to confirm that one document for the Adopting entities would be fine and there is no need for 2 documents / 2 separate plans.

Yes,. if you have determined they are still a controlled group after the Family Attribution Rule changes of SECURE 2.0 they can have one plan.  If not, as CUSEFAN suggested, they could have a MEP.

I can't tell you how many times I've had people (including some investment reps who peddle the things!) say "It's not a 401k plan, it's a solo-K".

And then there's the people who refer to PS or 401k plans as pension plans.

A plan that tax law classifies as a profit-sharing plan, whether it includes or omits a § 401(k) cash-or-deferred arrangement, is a pension plan if one follows ERISA title I’s definitions.

ERISA § 3(2)(A), 29 U.S.C. § 1002(2)(A) https://www.govinfo.gov/content/pkg/USCODE-2023-title29/pdf/USCODE-2023-title29-chap18-subchapI-subtitleA-sec1002.pdf.

And while tax law might not distinguish between “solo-k” and some other plan with a § 401(k) arrangement, an investment or service provider’s business classifications can matter greatly to consumers and to their intermediaries and advisers.

For example, Individual(k)Ô (Ascensus claims this as a trademark) gets a set of service agreement, trust agreement, plan documents, investment arrangements, and other provisions that’s distinct from other business lines. And differences between a “solo” and a “regular” 401(k) service arrangement can affect even a plan’s provisions. The plan-documents set Ascensus requires for an Individual(k)Ô omits some choices Ascensus allows for other business lines, and imposes some plan provisions Ascensus does not require for other business lines.

The sales or business lingo might seem awkward to a tax practitioner, but might convey meaning to consumers, intermediaries, and advisers.

For better or worse, “solo 401(k)” now has some trade-usage meaning to describe generally an arrangement a service provider designed for an individual-account (defined-contribution) retirement plan its sponsor intends as one not expected to cover any employee beyond a shareholder-employee or a self-employed deemed employee, or one’s spouse. And that trade-usage meaning includes a sense that investment and service providers offer constrained terms for those plans.