Multiple businesses

[flyingcheesehead]

OK, this goes along with the "Property ownership" thread in a way.

I've been wondering for a while what the best way is to go about owning somewhat unrelated businesses. The rental properties would be one, aircraft leasebacks might be another, and software development a third.

I'd probably be starting multiple S-corporations for the various ventures so as to keep them separate from a legal standpoint, but would it make sense to have them all be subsidiaries of a "KS Holdings" type of corporation as well? What are the advantages and disadvantages of that?

I have owned a corporation in the past, so I do have some idea what I'm getting into.

 

[AdamZ]

Kent the simple answer is perhaps. Seriously not trying to be smug here but there is often no simple answer to business formation and multiple business use.

The laws in each state vary sometimes tremendously. Not only do the business laws vary but other law affecting business' vary such as laws regarding execution of judment, insurance, taxes etc. You mentioned forming several Sub "S" corporations, but depending upon the law in Wisconson an LLC may be more expeidant, less expensive and less cumbersome from a record keeping point of view.

Since you want to start multiple entities you may or may not be increasing your tax burden or if you experience a tax savings it may be offset by the additional insurance premiums you may have to pay depening on the type and number of etities you create.

"subsidiaries could acually render useless the seperation that you are trying to create between these entities. I'm really not trying to duck your question but I follow the old adage that anything worth doing is worth doing right.

So here is where you start. Formulate a goal for your business / businesses, then work backward and formulate how you would like your business to operate, what you would like to accomplish with each business, markets, the requirments of each business ie inventory, personel, marketing, capital investment and capital equipment needed if any.

Then take your plan to a business lawyer, a business lawyer Kent, not the guy who did your cousin Gracie's divorce and Uncle Jerrys auto accident. You can find young competent attorneys to work with you at a reasonable price. The business attorney is key here. It will be well worth your money. If you told me Gee Adam I just want to start a business to teach Semi driving I'd tell you you may not need to go that route. But for what you are looking for its worth the time and money.

Best of Luck, I love the entriprenurial spirit.

 

[SCCutler]

I agree with learned counsel, but with one caveat: Most any of the various corporate-type entities can likely serve your needs as far as liability protection goes, but I always urge consultation with a competent CPA to ensure that you are addressing any and all tax considerations.

 

[flyingcheesehead]

You mentioned forming several Sub "S" corporations, but depending upon the law in Wisconson an LLC may be more expeidant, less expensive and less cumbersome from a record keeping point of view.

Yeah, went through that decision process once already (the aforementioned previously owned corporation). In WI, the tax benefits of sub-S vs. LLC are significant. Our lawyer handled all of the messy stuff for $400 (though that was back in 1998). Well worth it.

So here is where you start. Formulate a goal for your business / businesses

Well duh, to make me rich.

I'm still in the "tossing ideas in my head" phase. I would not be starting these all at once. They'll come about one at a time, but I want to have the best structure in place from the start.

Then take your plan to a business lawyer, a business lawyer Kent, not the guy who did your cousin Gracie's divorce and Uncle Jerrys auto accident. You can find young competent attorneys to work with you at a reasonable price. The business attorney is key here. It will be well worth your money.

Amen to that. Already have one, and you're right - Reasonably priced and well worth it.

Once I get a trainee to actually stick around for more than two days (like both of the last two ) I'll have a little more time to spend on it.

 

[wsuffa]

Esteemed counsel has offered good advice.

You need to have a trusted counsel familiar with corporate law in your state.

Without knowing anything else, I might be inclined to look first at maintaining separate corporations for each business. In some states, liability can "reach through" a corporate structure unless it is set up properly. Having separate companies may make it easier to dispose of assets when the time comes.

Sit down with counsel, outline your goals, exit strategy, and liability risks. Then set up an appropriate structure.

BTDT.

 

[Michael]

I have several businesses and a property holdings corp for the property which in turn leases to my other companies. keeps the property seperate from the business in case of whatever.