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Corporate Bylaws and initial board of directors resolution
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Question: I'm in process of setting up a C corporation and a business, I would like to know how to set the business up as a division of the corporation?

Response: A "division" of a corporation is really just a creature of accounting. It is not a separate legal entity. Thus, there are no filings done to create a "division". The only exception would be if you are going to use a separate trade name (also known as a "fictitious name") for this division: i.e., All-True Paving, a division of Jones Construction, Inc. or Jones Construction d/b/a All-True Paving. If the corporation was going to use a trade name, generally the corporation is required to file a trade name designation with the secretary of state's office. Here is the Missouri form used to register a fictitious name with the secretary of state.

Speak with your accountant regarding the mechanics of keeping a separate set of books for a division.



Submitted: 8-28-2006; Denise, Missouri
Response: 8-29-2006; JJR


User Comments

  • From: Debi
    State:CA
    Posted: 05/27/2008
    Subject: Corp. Div
    Comment:
    Can you set up different division in a corp one being non-profit and the other being profit?

  • From: Joe
    State:Missouri
    Posted: 06/06/2008
    Subject: Nonprofit division of for profit company
    Comment:
    Can a nonprofit corporation have a for profit subsidiary? Yes. It's common so long as the profits generated by the for profit corporation subsidize the non-profit parent's charitable, educational, religious or other mission.

    Can a for-profit parent have a non-profit subsidiary? For profit corporations often have non-profits with which they are affiliated in some capacity. I question whether a non-profit could be a "subsidiary" of a for-profit in the sense that the for profit corporation completely owns the non-profit. However, a situation where the directors of the for profit corporation serve as the directors of the non-profit should be an acceptable arrangement (I'm not aware of any prohibition against it). Thus, the for profit effectively controls the non-profit subsidiary but does not own it's shares in the traditional sense.

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