Legal Question in Business Law in Utah

Parent and Subsidiary Relationship and Liability

I'm a college student and I started a small advertizing business out of my apartment. I have completed a significant amount of work for a local business who has been very plesased with my product/service. I occasionally need an office to meet clients. In exchange for use of office space, the local business suggested that I become a subsidiary of his business. He wants to market my business as a subsidiary of his. I get connected to a larger business and have an office in which to meet clients. If I agree to this, do I/can I lose control of my business and can my business/me (I'm currently a sole proprietorship) be held liable for debts of the parent business? Can my business, business name, etc be sold or used as collateral by the parent business? Is there a way to become a subsidiary while mainatining control of my business, assets, and shield myself from debts of the parent?


Asked on 3/17/03, 7:14 am

1 Answer from Attorneys

Alvin Lundgren Alvin R. Lundgren, L.C.

Re: Parent and Subsidiary Relationship and Liability

There should be a written agreement between you and the other business, in which you should address all of these concerns. The agreement can and should include all of business, compensation, and ownership interests. DO NOT move in on an oral agreement.

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Answered on 3/17/03, 9:38 am


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