Legal Question in Business Law in Pennsylvania

Restaurant Owner Liability

Is is possible (or advisable) for a small restaurant owner to incorporate a restaurant, bar, and parking lot (all constituting one premises) separately as three distinct entities?


Asked on 11/12/07, 8:01 pm

2 Answers from Attorneys

Daniel Pepper Pepper Law Group, LLC

Re: Restaurant Owner Liability

Depending upon your specific circumstances, it is probably possible, but whether it is advisable would mean a pretty comprehensive review of your situation (including tax considerations).

Feel free to contact my office if you'd like to discuss further.

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Answered on 11/12/07, 8:46 pm
Roger Traversa Arjont Group (Law Office of Roger Traversa)

Re: Restaurant Owner Liability

You asked about incorporating 3 related business parts as separate entities to limit liability.

Of course you can do it. The question is how difficult it would be to actually do so and would it work.

In order to survive an attempt to pierce the corporate veil each business must have a legitimate purpose to exist as a separate entity. This would mean each would have to have an arm's length contract with the other sides and also must have a suitable revenue stream to account for its existence.

To me it doesn't sound practical or effective. As a corporate or plaintiff's lawyer I could pierce the veil unless you are scrupulous about you accounting and management practices.

Generally you will be better off making sure you are properly managed and insured then trying to beat a lawsuit that hasn't even been filed.

Regards,

Roger

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Answered on 11/13/07, 2:48 pm


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