Legal Question in Business Law in California

Re: Two buisnesses one corp?

The options are virtually wide open here. Your best route here would be to speak with an attorney on what exactly you two are trying to accomplish, as well as what protections you want, etc...then the various types of legal entities you should open can be better narrowed down and construed. For timely, affordable legal assistance in this matter, contact us directly for a free phone consultation.

Re: Two buisnesses one corp?

The manner in which you do this will depend on your resources as well as the probable liability of each business.

One of the problems with having both under a single corporation is that you place each separate business at the mercy of the other. THerefore, it is likely that you will be advised to have two separate entitites.

Check out an article I wrote regarding choosing the type of business entity: http://www.legalwarriors.com/articles.htm

Caleb

Re: Two buisnesses one corp?

Partnerships are NEVER recommended - they have essentially unlimited liability without any legal protection for the partners. One corporation or two, technically doesn't matter legally; they can be set up adequately either way. Practically however, two different businesses will require different records keeping, profit & loss issues, etc, and will require more effort to manage than if done seperately. If under only one corporation, if one fails or gets into trouble, the entire system would suffer from the debts and liabilities. Keep them seperate. Feel free to contact me if interested in doing this right and having proper corporate status.

Re: Two buisnesses one corp?

First of all, I do not believe anybody should ever do business as a sole proprietorship or as a partnership. The asset protection and tax advantages offered by an LLC or a corporation are well worth the cost of forming one of these two entities. I just did a podcast on this topic that you can check out at the the following link: http://www.thelawminute.com/2006/10/should-i-incorporate-my-california.html

Running two businesses under one roof can be cheaper (i.e. it costs less to form 1 corporation). However, a claim against one business puts all of the corporate assets at risk. You might considering keeping the businesses separate for that reason alone. You should also talk to a CPA about any taxes issues that might complicate such a business arrangement.

Your best bet is to put together a good team of business advisors to discuss your plans and then select the best vehicle to put your plans into action. If you want competent, afforadable legal advice, feel free to call my office.

Re: Two buisnesses one corp?

A partnership can be the simplest most cost effective manner to start businesses. However, it offers little or no protection from liability, and can be a headache rather quickly if there are any disagreements.

Secondly, you stated you are getting married soon to your soon to be partner. This presents other questions in California since we are a community property state.

My office can answer your questions quickly and cost effectively. Please call my office to schedule an appointment, or teleconference.

Regards,

JDH, Esq.