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07-06-2002, 11:51 AM #1Junior Guru Wannabe
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- Jun 2001
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Separating business into separate companies
Say you are running a LLC or Corporation that does business in a lot of different fields.
To keep it relevant the WHT, your business also has a hosting service. Your hosting service is growing so well that you decide to separate it into LLC or Corporation, with your parent comapny owning 100% of it.
What are the advantages and disadvantages of doing so.
The advantages I can think of are:
Limited Liability : Only the hosting service can be sued, not the main LLC/INC.
Bankruptcy Protection: Bankruptcy of hosting service, will not effect parent company.
Disadvantages:
Cost of forming a maintaining two separate companies.
Chance of veil piercing being imposed by courts.
Are these correct, and are thier any other benefits/pitfalls to operating this way?Chairman and CEO
ENetExperience LLC
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07-06-2002, 03:20 PM #2Web Hosting Master
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- Aug 2000
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Re: Separating business into separate companies
You really should talk to a lawyer about the specifics of your company and the laws in your state, but:
Limited Liability : Only the hosting service can be sued, not the main LLC/INC.
The point is, don't overestimate the amount of protection you'd be getting. Forming a corporation or LLC doesn't bring the owners complete and absolute protection from liability.Specializing in SEO and PPC management.
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07-07-2002, 08:16 AM #3Aspiring Evangelist
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- Sep 2000
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in a lawsuit the corporation AND the owner(s) of the corporation are sued
if you are soooooo paranoid about about lawsuits take it offshore
and let anyone try to get you or the offshore HOLDING company
theres a pearl
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07-10-2002, 11:05 PM #4Junior Guru Wannabe
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- Jun 2001
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I would think, if you ran your business correctly, didn't try any funny stuff, and complied with all regulations, then your personal assets would be untouchable unless a personal guarantee was made somewhere.
Chairman and CEO
ENetExperience LLC
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07-11-2002, 02:43 PM #5WHT Addict
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- Sep 2001
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Re: Separating business into separate companies
Originally posted by Lord MJ
The advantages I can think of are:
Limited Liability : Only the hosting service can be sued, not the main LLC/INC.
You should talk to an attorney (which I am not). Even if you are operating by the books, there are still a bunch of paper chasers out there and you never know who you'll piss off by accident.