# 401(k) plan termination

Shutting the seller's retirement plan before close so it is never inherited.

In a stock sale the company keeps its retirement plan and the plan's compliance history comes with it, so buyers routinely require the seller to adopt a termination resolution dated before closing. Adopted after, the buyer's own plan can be treated as a successor and absorb the old plan's defects. In an asset sale the plan stays behind and the rehired staff simply enroll in yours. Ask which shape applies the week the [LOI](https://searchspheresource.com/glossary/loi) is signed, and get the resolution date in writing.

In numbers: A plan holding $2M for 30 employees takes 60 to 90 days to wind down, and the resolution has to be dated before the closing date to keep it off the buyer's books.

Source: https://searchspheresource.com/glossary/401k-plan-termination
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt