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  1. #1
    Non-Member QiSoftware's Avatar
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    When to make a separate business entity?

    My main company is QiSoftware and this entity is registered with the state in which I reside. I added web hosting to my offerings and promote the service as part of QiSoftware's offerings.

    Web hosting can be a service of a business in the state? Does anyone disagree?

    Q...

  2. #2
    phpLD Fanatic bronze trophy dvduval's Avatar
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    I think the reason you would make a new entity would be to split the liability, or to make it possible to sell one of the companies.

  3. #3
    Non-Member QiSoftware's Avatar
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    Thanks for the response dvduval. Great example.

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  4. #4
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    There a loads of good reasons to split a company, but if you can't think of a reason to split your company then you probably don't need to. Having two companies will increase overhead is far as tax preparation, administration, fees, etc. But, for many businesses is wise to do it for tax purposes (the big one), to separate liability between interests, or for operational matters and ownership/equity deals.

    For example, we have two companies that make up our offshore center. One company does the domestic marketing and project management. Another company is offshore handles the sourcing and vendor affairs and acts as a clearinghouse for the other. They deal exclusively with each other, but when it comes to taxes we always offset the profit and loss in order to legally reduce taxes to the extent possible. Very effective, but not cheap and not recommended for those who are new to business.
    The fewer our wants, the nearer we resemble the gods. Socrates

    SAGEWING LLC - QUALITY WEB AND MOBILE APPS. PREMIUM OUTSOURCING SERVICES.
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