Most entrepreneurs I know are driven, curious and never content with the status quo. These traits are probably why so many of them dabble in multiple ventures. A restaurateur may open a wine shop; a personal trainer may launch a line of fitness clothing. There’s always a new opportunity out there somewhere, and diversifying your income can be a great strategy.
If you are running multiple businesses or thinking about starting a second one, you may be wondering what is the best approach for legally structuring each business: should you have separate corporations or businesses for each one or a big umbrella company to hold them all? Are there any limits to the number of companies or business names and entrepreneur can incorporate?
Generally speaking, different ways to structure multiple businesses. There are advantages and disadvantages for each approach and the best structure will depend on your personal situation. Here is general advice to consider, and you can always discuss your specific needs and details with a lawyer.
INCORPORATE INDIVIDUAL BUSINESS NAMES OR COMPANIES
First, there’s no limit to how many businesses or companies one person can form. Many entrepreneurs opt to register a new business name of the company for each of their startup ventures. For example, you can form a business name for your landscaping business and another one for your tailoring business.
The main advantage of this approach is that it isolates the risk to each individual business. Should a client sue your landscaping business, your tailoring business will be protected. Likewise, if tailoring has a few down years, your landscaping business won’t have to share in any of the liability.
The main downside of this approach is that it involves additional maintenance fees and paperwork. For example, you’ll need to pay to incorporate/form a business name for each business, as well as any annual maintenance fees/forms. You’ll also need to get separate business licenses for each business, and file tax, For some entrepreneurs, all this separate paperwork can be a pain. But for others, the added fees are well worth it in order to protect each individual business from the others.
In particular, real estate investors often form a company for each property in order to shield each investment. If “Property A” is sued, you won’t be risking any of the assets belonging to “Property B” or “Property C.”
With this approach, each business venture can use the right branding and company name, while you simplify some of the annual maintenance.
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The bottom line is there’s no (legal) limit to how many business ventures you can start and run. Just make sure that you properly account for your liability risks when structuring these ventures.


courtesy: A.Y.E Trust Fund Legal Team

for more information visit www.ayetrustfund.org

or send enquiries to info@ayetrustfund.org now.

This is helpful. Thanks