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Infolawyer, Attorney
Category: Business Law
Satisfied Customers: 57693
Experience:  Experienced lawyer
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I own a temporary staffing business with 99.9% ownership.

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I own a temporary staffing business with 99.9% ownership. I am contemplating expanding or beginning a vendor management service for some of my clients. Is it a legal conflict of interest to give our company the same fair shot at the contracts that it used to have if we are managing all their vendors. We could prove vendor nuetrality, but is this legal or do I have to form another company. If I did form another company and still had ownership in this one, is it a legality also? In other words can I do this in some legal manner without giving up the other company?
Good evening and thank you for the question. You can run more than one company, both your current one and future one. The issue you are concerned about goes to duty of loyalty. As long as you do not compromise one company for the benefit of another, shareholders or co owners should have no claim against you.
Customer: replied 7 years ago.
Do I have to form another or can it be an extended service of our current company?
Either option works. The reason to have different entities is if you want to segregate proceed, investors, debtors and creditors of the company. For example, if your current company is doing badly, the new company can have a fresh slate untouched by creditors of the old company.
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