The business structure is essentially a holdings company with several subsidiaries:
- The holdings company is a C Corp and the subsidiaries are LLCs (wholly owned by the C C orp).
- The C Corp has a single owner that is paid a salary by the C Corp.
- The C Corp owner actively participates in the daily activities of the subsidiaries and charges a management fee to the subsidiaries.
- The subsidiaries do not currently have employees but will in the future. Employees of a subsidiary will be paid by the subsidiary as a W-2 employee.
I become confused when employees are hired by the subsidiaries. A subsidiary will pay employees directly from the subsidiary as W-2 employees, which may have different employee benefits packages than the C Corp parent. Is the C Corp owner able to participate in a solo 401(k) while the subsidiaries’ W-2 employees have a standard 401(k) offering?