Successor Plan?

Do control group rules affect successor plan rules? I have a person who owned two businesses, only one with employees. This Company with employees  has been sold and all employees hired by the new company. The business owner/sales person is going to a 1099 consultant to the business. Can they establish a 401k plan under the other business they owned (or a new one they create)? Or should they just establish a SEP which I know is not a successor plan. 

Thanks

You mean they never had a plan and now want to establish one for the consultancy?

They had a plan for the company with employees and terminated it as a result of the sale. Now, would like to sponsor a Solo K (or DB) for the consultancy. Thanks

What is the "successor plan" issue, that they want two 415 limits in a single year?

I don't want a new plan to disallow the distributions from the prior plan. All those assets have been distributed due to plan termination.

OK. I assume that the owner is 2% or > of the population of old plan. Under 1.401(k)-1(d)(4)(I), CG is determined at date of sale, and the "other business" may have been in a CG. Arguably, a new business that did not exist on the date of sale would not be in the CG, but this gets really complicated and substance over form issues may intrude.

Thank you for comments, I do appreciate them and they dovetail with my research as well. I think the SEP for 2018 is the proper solution.

UR welcome, Kac1214.