RE: Should I be creating another corporation? - need some help..

by YasirYar 15 replies
Hey guys,

I am about to start launching a couple of products and I already own an SEO company.. so I was wondering if it would be "right" to show both the revenues under the same corporation name?

Or is it a better idea to start another corporation?

I am based in Canada.

Please do let me know if you have had similar experience in the past.
#main internet marketing discussion forum #corporation #creating
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  • Profile picture of the author travlinguy
    The beauty of corporations is that they can have subsidiaries, divisions, spinnoffs and more. Without knowing more about your situation, I wouldn't run up additional expense when it's not necessary.
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    • Profile picture of the author YasirYar
      Originally Posted by travlinguy View Post

      The beauty of corporations is that they can have subsidiaries, divisions, spinnoffs and more. Without knowing more about your situation, I wouldn't run up additional expense when it's not necessary.
      Hey,

      Thanks for the answer

      So I should not make one and create another division within the corporation for the new product revenues?

      Yasir
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  • Profile picture of the author GMD
    Banned
    Owning and having set up a corporation already, wouldn't it be less expensive just to taking your new business activity and run it as a "d.b.a."?

    In other words, you keep your corporation but having your corporation "do business as" whatever name you come up for your new activity.

    Therefore, if you're XYZ Inc., you would be XYZ corporation doing business as ABC. Revenue would still be accounted for by the corporation but your new activity would be sufficiently defined by your new doing business as name.

    Plus you're looking at keeping the paperwork simpler: instead of having two separate corporations to account for on paper, you have only one.
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  • Profile picture of the author hustlinsmoke
    That depends on you. Do your websites make enough for you not to want to put them at jeopardy. The big guys always create separate llc's or incorps so if it goes bad when they go under there other assets are not harmed.
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  • Profile picture of the author Troy_Phillips
    I actually run several DBA through my s-corp but have been thinking it might be wise to set up a separate LLC for my new authority site as getting funding through an s-corp can add about 30 days to the process with needing to get all the officers in the bank at the same time and other loopholes.
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  • Profile picture of the author airpr23
    Well I don't incorporate on my own but my attorney creates 2 separate corporations. One for the site and one for the cashflow. So if the main site gets sued, they cannot touch the income. I know it's more complex but that's just a general overview.

    But I would create separate corporations, it's better to be safe and pay the extra money to get professional help. And make sure you set things up properly.
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    • Profile picture of the author YasirYar
      Originally Posted by hustlinsmoke View Post

      That depends on you. Do your websites make enough for you not to want to put them at jeopardy. The big guys always create separate llc's or incorps so if it goes bad when they go under there other assets are not harmed.
      That makes sense. Yes my business makes enough.. but "enough" can be quite subjective lol.

      Originally Posted by Troy_Phillips View Post

      I actually run several DBA through my s-corp but have been thinking it might be wise to set up a separate LLC for my new authority site as getting funding through an s-corp can add about 30 days to the process with needing to get all the officers in the bank at the same time and other loopholes.
      Great point, I did not know this.

      Originally Posted by airpr23 View Post

      Well I don't incorporate on my own but my attorney creates 2 separate corporations. One for the site and one for the cashflow. So if the main site gets sued, they cannot touch the income. I know it's more complex but that's just a general overview.

      But I would create separate corporations, it's better to be safe and pay the extra money to get professional help. And make sure you set things up properly.
      Very good points.. So they cannot touch your money because the cashflow is in a separate legal entity?

      Very interesting..
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  • Profile picture of the author luckyshah290
    The beauty of corporations is that they can have subsidiaries, divisions, spinnoffs and more. Without knowing more about your situation, I wouldn't run up additional expense when it's not necessary.
    You are right ... corporation has a lot of divisions .. maybe its time for you to expand your company .. That is actually a lot more better for you and your Corp .
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  • Profile picture of the author airpr23
    Yeah, they can only get the assets within your corporation.
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  • Profile picture of the author Brad Kast
    Any lawyers have an opinion on which has better benefits for an online entrepreneur, LLCs or S-Corp's?
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    • Profile picture of the author Troy_Phillips
      Not a lawyer but ... it really depends oh what you are trying to accomplish. S-Corps can get heavy and Limited Liability says a lot in it's title.


      Originally Posted by Brad Kast View Post

      Any lawyers have an opinion on which has better benefits for an online entrepreneur, LLCs or S-Corp's?
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  • Profile picture of the author Troy_Phillips
    Don't know how the mods will react to promoting your WSO by copy and pasting this message in several threads.

    Originally Posted by goneebo View Post

    Just launched my WSO today explaining this... it includes all of the forms you need ect.

    l
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    • Profile picture of the author YasirYar
      Originally Posted by luckyshah290 View Post

      You are right ... corporation has a lot of divisions .. maybe its time for you to expand your company .. That is actually a lot more better for you and your Corp .
      Hmm.. I will talk to my accountant about this. I studied accounting in my bachelors and masters, but I still know NOTHING about it lol.

      Originally Posted by airpr23 View Post

      Yeah, they can only get the assets within your corporation.
      Very interesting, so starting more corporations definitely helps then.

      Originally Posted by Brad Kast View Post

      Any lawyers have an opinion on which has better benefits for an online entrepreneur, LLCs or S-Corp's?
      I wanted to ask the same thing, only .. I forgot.

      Originally Posted by Troy_Phillips View Post

      Not a lawyer but ... it really depends oh what you are trying to accomplish. S-Corps can get heavy and Limited Liability says a lot in it's title.
      True, thanks for the feedback.

      Originally Posted by Troy_Phillips View Post

      Don't know how the mods will react to promoting your WSO by copy and pasting this message in several threads.
      Yeah, probably not a good idea.
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      >>>Get your websites ACTUALLY ranked by checking these out: Quantum SEO Labs, Home Page Link Building & SERP Ability. Want to get rid of negative listings? Check out Reputation Enhancer.

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      • Profile picture of the author cwilliams6009
        Hi YasirYar, good questions and I mostly agree. I am a lawyer -- live in BC but trained in the States.

        The responses you've gotten are mostly bang-on. Issues include:

        Liability protection: you are not liable for corporate losses/bankruptcies/lawsuits, nor is any other corporation liable. Another "division" would also be liable, if in the same corporation.

        Cost/complexity: yes, corps have documentation requirements as you know, and also cost a bit more (maybe $150 to set up here in BC, plus any lawyer fees).

        IMPORTANT: Your corporation will NOT PROTECT YOU in case of loss, if the court decides you have not followed the procedures to keep the corporation as a separate entity. This is called "Piercing the veil" and you do not want the veil "pierced" if you are standing on the other side.

        Oh Jeez . . . am I allowed to say this? check out Lawcookies for free narrated videos on the subject of incorporation for small business.

        And BTW this is not legal advice, just my humble opinion.
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  • Profile picture of the author kindsvater
    A few issues in the thread:

    OP: Can more than one product have their revenue under one corporation? Yes. Look at Google as an example. Most corporations are setup in their articles to provide any product or service - not just one.

    Does a corporation avoid personal liability? Not for most people on the forum. If you are personally involved in an activity then incorporating is not a liability shield for legal problems arising from the activity. What happens is you and the corporation get sued.

    Are there tax benefits, and possible asset protection benefits, by having two businesses (not necessarily both corporations)? Yes. For example, Business X provides a service to the public. Business Y provides a management service to Business X that effectively drains the assets of Business X and puts them in Business Y. Along the way you make use of specific tax benefits available to each separate business.

    .
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