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Old 16th October 2010, 08:39 PM   #1

Join Date: Oct 2010
Posts: 1
Default Division Of Corp Or Completely New Company

My husband and I have a small lawn service in Fl which is incorporated. He is looking to expand his services to include exterior cleaning. He will continue to do his lawn service on his own, but will work with someone else (like partners) in regards to the exterior cleaning. He has already added the pressure washing to his current business license but not sure how to handle the rest. My husband and his friend plan on splitting all money from the cleaning 50/50, so my thought was to either create a division of our current corporation or create a completely new corp. If we did it as a division of our existing corp, would we use the same EIN or would we need to apply for a separate EIN? Also, if my husband has the business license to do the cleaning, would we need to get one for his friend as well? Any advice is welcome. thanks!

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Old 17th October 2010, 11:24 AM   #2

Join Date: Apr 2010
Posts: 79


I know it could be a pain, but I say a separate corporation. It's all about liability and having a bad partner. For example, if the partner is doing exterior cleaning for a customer and he left equipment in the customer's driveway and the next door neighbor trips and falls at least your Lawn service is unlikely to get sued if you seprate the companies. If you do not separate the companies the lawn service is now getting sued for something the partner of the exterior cleaning business did.

Also, if he turns out to be a bad partner and you do not separate the corporations then this bad partner is now a bad partner in both the lawn service and the exteroir cleaning service and to me that spells big trouble.

Michael Barbarita - Next Step CFO - CFO Services
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