Forming Corporation

Question Details: My wife and I have a daycare and garage door business. We want to incorporate them, can we incorporate under one name and the two business fall under that and how do we do that.

Asked 7/16/2009 under Business | 269 View(s) | More Legal Topics

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A company, such as a corporation, can have many different business, so you could simply set one corporation. In the description of purposes/powers, it will be simply to do anything legal--that covers you, and lets you run any biz under it.

I'd suggest setting up different corporations, though--the cost of incorporating is fairly low (a few hundred dollars usually, including legal fees), and that way, each business is protected from the other. For example, say a child is injured at the daycare, and it's more than your insurance covers--would you want to lose your garage door business? Or vice versa. Also, if one business is losing money or going insolvent, you can shut it down w/out affecting the other; you could sell one to someone else or take someone as a partner for one, w/out affecting the other; etc. There are many advantages to having separate corporations for businesses in very different lines of work, and the only real disadvantage is some extra costs in setting up  and filing and some extra paperwork.

Also consider whether a corporation or an LLC (limited liabilty company) is better for you--they offer many similar advantages, but have a few key differences. And also consider, if you go for a corporation, whether you would want an S-corp or a C-corp--the tax treatment is different.

Your best bet is to find a local business attorney who can explain the different options, help you select the best one(s) for your own unique needs, and then set them up for you. This is pretty bread and butter legal work, so any competent attorney should be able to do it for you--you don't need premium or high-powered legal help. If you don't have an attorney, this site can help you find one, or else ask some other small biz owner you know and trust who he/she uses.

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