 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
   |
|||||||||
|
|
Ask a Lawyer -- Corporations
|
|||||||
|
Brought to you by MedLawPlus.com®-- Corporate Bylaws and initial board of directors resolution Price: $14.99 (free trial) |
|
Question: I have an S Corporation (NAME) I. C. CLEAN CARPETS, INC. My question is if I start doing some different type of business, like painting new homes for a builder, how do I go about creating a sub company or division under the S Corporation? Response: There are two main options: (a) run the new business as a separate legal entity (i.e., create a new corporation for the new business) or (b) run the new business as a wholly owned unit of the existing corporation with no new legal entity. The advantage from a legal perspective of running the two businesses through separate legal entities owned by you is that the debts or liability of one business could not be claimed again the assets of the other business. For instance, let's say one of your painters is driving a company van on company business and gets into a serious accident injuring a third party. The injured party could only make his or her claim against the corporation that owned the painting business leaving the carpet cleaning business free of liability. There also might be an advantage relative for workers' compensation insurance and unemployment taxes from creating a new corporation to run the new business. The downside to a new corporation mainly has to do with taxation plus the need to file separate income and employment tax returns for the new corporation. I suggest sitting down with an accountant to discuss the issue before forming a new corporation for this business. If you merely want to run the new business as a unit or division of the existing corporation but desire to have a new name for this business unit (i.e., I.C. Paint Houses), that is easy to accomplish. All that is necessary is to file a fictitious name registration with the state stating that I.C. Clean Carpets, Inc. shall be doing business as "I.C. Paint Houses". Contracts, correspondence, and other documents concerning the painting business would refer to it as "I.C. Clean Carpets, Inc. d/b/a I.C. Paint Houses". Here is a link to the form used to register a fictitious name in Florida: link. Submitted: 1-11-2005; Idelfonso, Florida Response: 1-13-2005; JJR Add A Comment |
Ask a Lawyer, Corporations Archives
DISCLAIMER The above is provided for informational purposes only and is NOT to be relied upon as professional advice. The information presented on this site comes without any warranty of correctness and, therefore, should not be relied upon. This service is not a substitute for the advice of a professional. No attorney client relationship is created through use of this site.
Home | Site Map | Library | Ask Atty | Privacy
Plastic Surgery | Divorce Lawyers | Legal Forms
MedLawPlus.com, Inc.
St. Louis, MO
Copyright 1999 - 2009 / Patent Pending
