QUESTION: I do have a question though – so I start a new C Corp and with that money start a business that will have employees – do I have to make my solo 401k plan that is from an unrelated business available to the employees in the new company? That does not seem to make sense.
ANSWER: Because the IRS solo 401k regulations specifically detail that a solo 401k is only for the business owner and his or her spouse or business partners and their spouses, you will not be able to offer the solo 401k to full-time employees. Further, you will most likely not be able to continue to maintain the solo 401k once you have full-time employees in your new business. Reason being, known as the IRS control group rules, once any company you control, whether the existing one or the new one, has full-time employees you can no longer participate in a solo 401k, but instead a Traditional 401k, defined as one offered to all full-time employees.
Regards, George in Virginia