Question for Bronchick, JHyre and others - Posted by Kevin

Posted by Kevin on February 12, 2002 at 09:32:49:

Thanks very much for your response. As a practical matter, how would we conduct business as “partners”? Would we enter into some type of joint venture agreement for each deal or is there a way to strike some kind of exclusive relationship with profit sharing, etc.? If the contracting corporation was a wholly owned subsidiary of the investing corporation, how would that effect liability, if at all? I guess the question is would a parent company be liable for the acts of its sub? I think all I’m really asking is how would you structure the relationship between the segregated entities, given the fact that we want to do business together?

I really appreciate your insights. Thanks again.

Question for Bronchick, JHyre and others - Posted by Kevin

Posted by Kevin on February 11, 2002 at 10:06:36:

I am contemplating going into business with a licensed GC for rehabbing and reselling (at least initially) SFRs. My question is this: would it be more advantageous for us to set up two separate entities, one that acquires and resells the properties and one that performs the rehab work? Or would it be best to organize as one entity for all purposes? Obviously, we’re looking for the most favorable tax treatment, but we’d also like to know of any other issues to consider.

As always, your insights are most appreciated.

Re: Question for Bronchick, JHyre and others - Posted by JHyre in Ohio

Posted by JHyre in Ohio on February 12, 2002 at 06:24:49:

Contract rehabbing work is high liability work- I’d keep that work segregated in a separate entity. Separate entities do not prejudice your ability to do tax planning, and may in fact help in that regard.

John Hyre