Legal Question in Business Law in California

Re: how do i structure to accomodate multiple businesses and multiple partners?

You need a lawyer, no question.

In general, and this can only be very broad as I do not have enough information, you will want corporations or LLCs. You may want one or more "parent" corporations and seperate or "child" corporations; one for each business. Keep in mind there are costs associated with each so there must be a balancing of costs, complexity and protections/benefits. There are also other things you should do for protections, such as adequate insurance.

I do not do this type of work, but can refer you. I do the lawsuits after these things blow up.

Joel Selik

Re: how do i structure to accomodate multiple businesses and multiple partners?

Need to incorporate..the holding company can be llc...and all others underneath the holding comany could be corporations. Muliple partners can be accomodated very easily.. Please try to structure it properly from the beginning.

Re: how do i structure to accomodate multiple businesses and multiple partners?

There is no single right way, with all others being wrong, or even markedly inferior. Instead, there are hundreds of individual questions and guideposts that a business lawyer would ask and/or apply to your grand design to come up with an organization structure that will handle current needs and accommodate growth.

The basic concernts are (1) liability limitation; (2) income tax effects; (3) operational compexity (keeping multiple accounts, preparing anf filing multiple returns, etc.); (4) set-up cost and complexity; (5) identity (marketplace visibility and acceptability); (6) lender acceptance; (7) licensing requirements (e.g. Dept. of Real Estate license requirements may oblige use of separate corporation; some licenses cannot be issued to LLCs, etc.).

I would keep it simple at first--maybe just a single "s" corporation -- then add entities as the need arises.

If you're thinking of acquiring a franchise, discuss your issues with the franchisor.

Use insurance.

Remember that no corporation or LLC protects its officers and directors from personal liability for fraud, undercapitalization or mismanagement in all cases -- look at Enron, for example.

Re: how do i structure to accomodate multiple businesses and multiple partners?

You find a good business and tax attorney in your area, and make an appointment. You take each venture as it comes along.

Re: how do i structure to accomodate multiple businesses and multiple partners?

Mssrs. Whipple and Koenen have given you proper advice. There really is no single way to do this. All of your various business considerations and tax consequences must be taken into account. It is rare that a single attorney will be fully versed in all the legal and tax issues involved. If you find one, you are very lucky. Otherwise, it would be wise to work with both a competent accountant and lawyer.

One of the gentlemen mentioned INSURANCE. Do not skimp on any insurance. You want adequate coverage so your personal assets are not at risk.

Finally, you are correct in assuming that it would not be wise to "cross-collateralize" your business ventures by having them under the same entity. If one ends up having a problem, the last thing in the world you need is to have that business drag down the others that you have worked hard to build up.

Re: how do i structure to accomodate multiple businesses and multiple partners?

You should not rely upon free advice from over the internet in order to make important decisions about substantial liability and tax issues. For starters, such advice needs to be based upon a thorough evaluation of your legal, tax, personnel, personal, and other needs in the businesses. I'm sorry, but you need to breathe deep and pay for sound advice and the legal work needed to set up such business structures, and establish a relationship with counsel that you can frequently call on these issues. Therefore, if you want to do it right, feel free to contact me.