united-states, umbrella, parallel-entrepreneur, business-structureI’m familiar with the concept of parallel entrepreneurship, but there’s a couple of points I’m not sure on:
Let’s say over the next several years I wanted to start up several ventures which are completely unrelated (broad examples: publishing, SaaS, e-commerce, and manufacturing).
What are the benefits of setting up an umbrella corporation to own each of the individual startups vs having them completely separate?
Assume that I’m not going to be the only founder of all of these, but would have a majority share in each (meaning the corporation would own whatever percentage of the company belonged to me and I would have full ownership of the corporation).
Does any of the pros/cons change if I were to own only a minority share of any of these startups?
This is similar to this question: Using an umbrella LLC to spawn brands with different focuses?
But I am not talking about just tacking on additional brands to the main company, I’m talking about separate entities which are all fully autonomous and incorporated businesses all owned by a single corporation.
I’ve heard of people doing this, so I assume there is some benefit whether it is taxes, easier management of assets, or whatever - I’m just not sure what those benefits are.
The most well know example that comes to mind is Richard Branson with his “Virgin Group” which is comprised of 400+ companies, though I admit I don’t know when he transitioned from individual ventures to having them under this umbrella - that may factor in to how beneficial this structure is. Also I realize he is in the UK and I’m in the United States which may or may not change the benefits of such a structure.
At that point its really just for legal protection and isolating the orgs. So should one company do something bad, your other companies are safe. Thats really the only legal component, as for taxes … based on the structure it would in theory allow dividends for each company to be paid to the holding org (taxed as income) and then you can simply take a nice paycheck from that holding corp without the double tax component. But its a lot to set up and you can always do it at a later date.
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