startup-costsInterested in starting my own business have been doing my research online about entrepreneurship, as I cannot afford college education, so forgive if I ask this question improperly ; I’ve been reading that starting a holding company is a great way to protect assets and capital between entities you control, my question is when should you start a holdings company should the filing be done before or after your subsidiaries are filed and already doing business ?
Suppose I wanted to take $10,000 and put it in an a account for the holdings company, and lend $5,000, and also invest $5,000 to the start up ? Is this okay or what would be the process of doing something like this, With asset protection in mind.
I plan to start doing business in Illinois or Florida first. I am from Chicago, that is my home town but i spend the winters in Florida. however if this type of filling can be done in another state to decrease filling fees will do so.
In the scenario you mention, the holding company transferred all of the $10K to the startup ($5K in a loan, $5K as owner %). So, what assets are left to protect?
Regardless of when you create a holdings company, there is always going to be some kind of transaction between entities. So if your holdings company provides a loan, what happens if it never gets paid back, or only some gets paid back? There is no protection.
I would advise you to keep things simple. You don’t need to create a holdings company to start a business. Just start a business.
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