Is there any statutory authority for a statement by a well known brokerage house that a sole proprietor or partnership cannot sponsor a SIMPLE? In this particular case, there are two owner-employees only, no common law employees. Thanks.

No. I think they are dead wrong if they actually said this. If you look at the SIMPLE Form 5304, under instructions for the employer on which employer may establish and maintain a SIMPLE plan, it even discusses self-employed individuals.

I agree with Belgarath.

…Would like to add that for a partnership, the partner cannot establish a plan- it is the partnership that established the plan.