Legal Question in Business Law in California

Re: Parent Company

It depends on what other concerns are. I might suggest incorporating each buz seperately.

Joel Selik

800-894-2889

Re: Parent Company

The simplest way is to start "divisions" of your company for different purposes. A "division" has no legal existence but is simply a way you organize your corporation. You can separate your accounting by divisions so you know how each line of business, but consolidate them for tax purposes.

You could also incorporate each business separately and have the main corporation be the stockholder of the others. Sometimes this protects the parent corporation and other subsidiaries from the liable of a subsidiary corporation. This is more complicated to set up and operate. You should definitely hire an attorney to help you with this and to decide whether it makes sense for you.

Re: Parent Company

As Mr. Snitow has suggested...you can do it in many different ways. Also...since you mentioned that you have a design company...please pay attention to the Intellectual Property aspect of your business. You can copyright your designs..if it is work for hire situation make sure you have proper contractual agreements with your clients. Also...Look and feel of Apparael and Package designs can be protected under Treade Dress Protection.

Re: Parent Company

You didn't say whether your current business is a partnership or whether it is incorporated or possibly even some other form of business organization. Here are some general guidelines that might be helpful; not all will apply.

1. If you are a partnership, the partnership agreement should describe (or at least mention) each of the lines of business, and perhaps should specify partners' duties, time and capital allocations, etc. to each.

2. If a corporation, is there anything limiting the permitted business activities in the Articles of Incorporation? (This would be unusual in California today.)

3. Check to see if you have all licenses required to conduct the new business.

4. Be careful that you have filed and published any fictitious business name or names you use. Avoid using any letterheads, business cards, advertising, etc. that misrepresents the identity or business lines of your company.

Finally, I would recommend being cautious about getting overextended and losing sight of your strengths and limitations. Keep your business plan current and monotor the capital needs, time demands and profitability of each business segment separately so if problems develop, you'll know where and why.