Controlled Group Plan Merger Question

Hoping someone can point me in the right direction here please. 

There is a controlled group of 2 entities. Both entities have an existing basic solo 401k plan with a brokerage firm. The goal is to restate those plans into one custom solo 401k plan that either entity can contribute to as part of the controlled group. The new plan document lists the original effective dates for both plans, specifies that it is restating a previously-adopted plan and creates a new trust for the plan effective in 2020. The plan administrator/sponsor is the 1st entity. The plan also states that members of a controlled group can contribute to it. 

I know the new plan will need to file a 5500-EZ for 2020 because the assets will be over $250k. I believe that both entities need to sign a resolution to adopt the plan. 

Is there anything else that needs to be done? Particularly for the 2nd entity because its own plan is basically going away and merging into the new plan under the name of the 1st entity? 

Merge one plan into the other and restate the surviving plan with both as adopting employers.

File a final return for the plan that goes away.

Thanks for your reply. I'm a little confused about filing a final return for the 2nd entity's plan. Does merging into the newly restated plan under the 1st entity's name really count as a termination of the 2nd entity's plan? The 2nd entity will be making contributions to the new plan in 2021. There won't be any distributions, all existing funds will be rolled into the new plan. Also neither entity has ever been required to file previously. 

From the instructions to 5500-EZ (2019, but safe to assume the same will apply for 2020 and 2021):

Who Does Not Have To File Form 5500-EZ You do not have to file Form 5500-EZ for the 2019 plan year for a one-participant plan if the total of the plan's assets and the assets of all other one-participant plans maintained by the employer at the end of the 2019 plan year does not exceed $250,000, unless 2019 is the final plan year of the plan. For more information on final plan years, see Final Return, later.

Final Return All one-participant plans and all foreign plans should file a return for their final plan year indicating that all assets have been distributed. Check box A(3) if all assets under the plan(s) (including insurance/annuity contracts) have been distributed to the participants and beneficiaries or distributed or transferred to another plan. The final plan year is the year in which distribution of all plan assets is completed

CBZ's post also points out "total of the plan's assets and the assets of all other one-participant plans maintained by the employer....does not exceed $250,000" which could be an issue depending on how long the controlled group has existed and how much the assets were in total for both plans.

30 minutes ago, Bill Presson said:

CBZ's post also points out "total of the plan's assets and the assets of all other one-participant plans maintained by the employer....does not exceed $250,000" which could be an issue depending on how long the controlled group has existed and how much the assets were in total for both plans.

 

Thanks for your response, I am just realizing that there probably should have been a 5500-EZ filed for 2019 because the assets of both plans of the controlled group combined were over $250k. 

Appreciate the help here so far. My plan for now: 

1) FIle a 2019 5500-EZ under penalty relief program for each entity

2) Restate plan of 1st entity as described above 

3) 2nd entity signs a resolution to merge its plan into the restated plan of the 1st entity

4) Both entities sign a resolution adopting the new plan

5) File a 2020 5500-EZ for the new control group plan and file another final 5500-EZ for the 2nd entity plan that was merged away

Hope I'm mostly on the right track now. Thanks much.