Solo 401(k) Plan and related employer

Can a business owner maintain a solo 401(k) plan if the business would be considered an affiliated service group with another company? The other company only has greater than 5% owners. What if the other company had employees with no ownership who would be eligible for the solo 401(k) plan?

Thanks.

1) Sure, as long as it satisfies 410(b), which it would if the entire population consisted of HCE's.

2) Then you would have to aggregate the solo k with another plan that covers enough of the NHCE's and otherwise satisfies all the rules.

1 minute ago, Mike Preston said:

1) Sure, as long as it satisfies 410(b), which it would if the entire population consisted of HCE's.

2) Then you would have to aggregate the solo k with another plan that covers enough of the NHCE's and otherwise satisfies all the rules.

Yea, what he said.  Except that he left out that "there is no such thing as a solo k plan" as you noted when you talked about other employees (non HCEs) who would be eligible, making it clearly not a "solo" plan of any kind! 

1 hour ago, Larry Starr said:

Yea, what he said.  Except that he left out that "there is no such thing as a solo k plan" as you noted when you talked about other employees (non HCEs) who would be eligible, making it clearly not a "solo" plan of any kind! 

It is a horrible descriptor.  Clients (and some of their advisors) think of it ("solo") as meaning the plan somehow contains pixie dust which allows a single participant (and spouse) plan to accept deferrals or employer contributions TO THE EXCLUSION of everybody else that a regular ("not solo") plan would otherwise cover. We (the collective choir I'm currently preaching to, of which you are of course a member) understand that solo is meant to be applied AFTER it is confirmed that only said single participant (and spouse) satisfy statutory eligibility after consideration of all aggregation rules.  Such is our burden to bear.  

23 hours ago, Mike Preston said:

2) Then you would have to aggregate the solo k with another plan that covers enough of the NHCE's and otherwise satisfies all the rules.

....And you probably would not like the result, so in that case make sure you understand the consequences of coverage.