My family (Father, Mother, Wife and I) are thinking about starting a couple of businesses:
Real Estate Investment Business
Online Used Bookstore
Online Affiliate marketing business
We are just not sure how to structure the legal entities.
Should we start one business that does all of these different things or should we start a different business for each of the areas?
Also, if we start a separate business for each industry/area should their be a "parent" company that owns the other businesses?
3 Answers from Attorneys
Generally speaking, each business should be its own corporate entity and having a parent company could be problematic.
Feel free to contact my office if you need assistance in the formation of the companies.
Roman R. Fichman, Esq.
www.TheLegalist.com │ @TheLegalist
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To paraphrase H.L. Mencken, — For every question, there is an answer that is simple, neat and wrong. --- Clearly, you raised several good question which cannot be adequately addressed in an email exchange. That being said, I concur with Roman... I normally advise against using "parent" entities in situations such as the one you mentioned. I invite you to call me to discuss the details of your plans.
Kindly note and remember that my response is merely a general comment on the law related to your question, and NOT legal advice or opinion. Also, your question and my response does NOT create an attorney-client relationship between us. You cannot rely upon what I have written, because I do not have all of the information that I need to advise you or render an opinion. Even simple facts you have not shared can completely change my answer. For me to give you legal advice or opinion, you would need to hire me to be your lawyer, and then we would need to discuss this in detail and go over the documents.
Please visit my website! www.bgartenberg.com or call me 973-921-0600 if you’d like to learn more about me or my practice. Thank you.
While I generally agree with the other authors, here is my suggestion. Each business should be separate, only because of possible liability exposures. I suggest using a LLC for each. Thus, assets of one business are separate from other businesses and protected from a possible liability claim against one business. Each LLC can be owned by a trust, as the master owner. There are many reasons to use a trust as the common owner; too many to list here.