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Old 08-26-2019, 10:29 PM
 
Location: SoCal
5,647 posts, read 9,491,994 times
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I want to setup a company. I am pretty much set to file in the State of Delaware as a corporation. The company will be engaged in technology development and manufacturing.

Then a friend suggested that I may consider to create a "holding company" on top of this "operating company" as a way to limit liability exposure of the operating company. I thought it may not be a bad idea as I can see down the road I can create different operating companies with a single holding company.

If you have experience in creating company structures, I'd appreciate to hear about your experience & get your take on things.
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Old 08-27-2019, 08:19 AM
 
7,279 posts, read 3,288,465 times
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Find a successful peer in your line of work and ask how they did it and for them to recommend a CPA and, if need be, a good corporate attorney.


In truth, filing as a Delaware corporate seems like overkill until you've actually made it big. Oh, wait. You're in California. Full speed ahead, then. Either that or move to Nevada, which has a business friendly environment and has equally lenient corporate taxes as Delaware.
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Old 08-27-2019, 10:25 PM
 
Location: SoCal
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Anyone?

This is the business section, is there no one experienced in starting companies?

Last edited by HB2HSV; 08-27-2019 at 11:04 PM..
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Old 08-28-2019, 07:29 AM
 
5,388 posts, read 3,596,464 times
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Quote:
Originally Posted by HB2HSV View Post
Anyone?

This is the business section, is there no one experienced in starting companies?
Many of us have started and are operating companies.

From your post, it's hard to tell what you're doing. Are you building a factory and hiring hundreds of workers to manufacture a new tech product? Or are you creating an app in your spare room? Or are you just thinking about a brand new company that you haven't started yet and want to get it set up right?
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Old 08-28-2019, 11:06 AM
 
Location: Silicon Valley
5,291 posts, read 2,341,645 times
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There's lots of reasons to have different entities. Op, you've not listed any. If you're going to be engaged in both design and manufacturing, you've either got enough money for an attorney or you've not thought this through yet.

Your goal at start-up is to get something moving. You can always perfect things later. Cross that bridge when you come to it. If later you find out you want IP to owned separate from manufacturing and separate from distribution ops....you can do all of that. The key thing up front is that if you incorporate....and we don't even know if you're going S or C...at least you have segregation from your personal accounts and your business matters.

Not that a bank is going to care, mind you. You're going to be personally guaranteeing any loans up front. However, it is helpful in the event that your self designed/manufactured and distributed product is later found to cause cancer in pet kitties and you get sued for $3B.
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Old 08-28-2019, 01:32 PM
 
Location: SoCal
5,647 posts, read 9,491,994 times
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Originally Posted by KaraG View Post
Many of us have started and are operating companies.

From your post, it's hard to tell what you're doing. Are you building a factory and hiring hundreds of workers to manufacture a new tech product? Or are you creating an app in your spare room? Or are you just thinking about a brand new company that you haven't started yet and want to get it set up right?
Fair question, Kara.

I am starting a brand new company and I want to set up right.

My first company involves in design & manufacturing of technology products. After demonstrating proof of concept, I foresee the option of either marketing the tech products directly or license it's IP. The 2nd option is proceed to incorporate this product into another bigger product and go into the market.

The best analogy I can give is, my first tech products is developing an automotive engine, say something unique with a 8-speed transmission gear. Once I developed it, I have the choice of selling this engine to other car companies, GM, Ford, etc. Alternatively, I can start a new car company taking advantage of my unique engine technology and market the sports car directly to the market, for example; car racing market. Organizationally, since the engineering & manufacturing process will be totally different, I can separating the companies as a separate entity with it's own management structures.

If I choose option 2, starting my own car company, then I can foresee the car company buys the engine from my engine company, thus creating value for the first company. It also lower risks for the car company because it utilizes a proven key technology, the engine. Just to stretch this business concept further, I can create a 3rd company if there's a market related to this concept. Get where I am going with this?

It's a similar concept as how Tesla started. It was first a battery company and secondarily as a car company. Once they developed the rechargeable batteries, then they proceeded to develop the rest of electric vehicle.

Since I forsee a multiple of companies under this concept, I wonder if it will be worthwhile to create a "holding company " to oversee these "operating companies".

One more important consideration, I expect to raise investment for each of these operating companies. Not sure if the "holding company " may complicate the investment. Alternatively, the investment can come directly into the holding company then invest accordingly to operating companies.
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Old 08-28-2019, 02:11 PM
 
Location: San Francisco
4,279 posts, read 1,138,362 times
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Quote:
Originally Posted by HB2HSV View Post
Anyone?

This is the business section, is there no one experienced in starting companies?
You’re essentially asking for free legal advice on the internet - and it doesn’t even sound as if you have a solid business plan in place (which could potentially, at least partially, answer your own question). That you are relying ‘on a friend’ or a forum doesn’t speak too seriously to the issue.
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Old 08-28-2019, 02:27 PM
 
Location: SoCal
5,647 posts, read 9,491,994 times
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Quote:
Originally Posted by CorporateCowboy View Post
You’re essentially asking for free legal advice on the internet - and it doesn’t even sound as if you have a solid business plan in place (which could potentially, at least partially, answer your own question). That you are relying ‘on a friend’ or a forum doesn’t speak too seriously to the issue.

So the purpose of this forum is?????

I am sorry, I thought the purpose of this forum is a freely exchange of idea and opinions. Apparently I was mistaken judging from the responses like yours.

You're assuming too much when use the word "relying". I am asking for friendly opinions and advice. It sounds like you are too cheap to offer either. Please refrain from responding.

Last edited by HB2HSV; 08-28-2019 at 02:38 PM..
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Old 08-28-2019, 02:49 PM
 
Location: San Francisco
4,279 posts, read 1,138,362 times
Reputation: 2599
Quote:
Originally Posted by HB2HSV View Post
So the purpose of this forum is?????

I am sorry, I thought the purpose of this forum is a freely exchange of idea and opinions. Apparently I was mistaken judging from the responses like yours.

You're assuming too much when use the word "relying". I am asking for friendly opinions and advice. It sounds like you are too cheap to offer either. Please refrain from responding.
Yes - exchanging ideas, of course. Free legal or business advice in a forum as to how to begin (without a clear, concise business plan), not so much. It’s not taken seriously. That said, good luck.
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Old 08-28-2019, 03:34 PM
 
Location: SoCal
5,647 posts, read 9,491,994 times
Reputation: 4765
Quote:
Originally Posted by CorporateCowboy View Post
Yes - exchanging ideas, of course. Free legal or business advice in a forum as to how to begin (without a clear, concise business plan), not so much. It’s not taken seriously. That said, good luck.
You are taking yourself too seriously. I can see I am dealing with someone who's lacking professional maturity here.

This forum response does not constitute "legal advice". Business advice, perhaps, but more like personal opinion. If I want to treat your opinion as business advice, then I'll have to qualify you in terms of your expertise which to me is non-existence, then I will pay you which now in the amount of zero. The sense of self-importance is mind-boggling.

It is obvious to me those who accused me of seeking "free legal advice" are incapable to provide business advise as such. It's simple, if you are an experienced business starter, then it is your willingness to share your experience and opinion and when you do so, it's much appreciated.

You don't need my "concise business plan" to understand what I am trying to do (see post #6 above) if you're an experienced business starter. It would be foolish for me to publish my "concise business plan" on the web anyway.

If you can not, but just want to make a big deal about how your opinion is worth money, please take your sense of self-importance somewhere else.

Last edited by HB2HSV; 08-28-2019 at 03:43 PM..
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