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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10629
Experience:  30 years of corporate, litigation and international law
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I would like to set up a subsidiary company under our main

Customer Question

I would like to set up a subsidiary company under our main S Corp. The main S Corp is an established company providing products for resale to businesses. The secondary company will be set up as an online direct to consumer business requiring us to collect tax in various states. Although our core company does not select direct to consumer, we have already had states coming after us for taxes in which employees now live. My questions are
1) with the subsidiary company protect our core company from potential tax exposure within the various states
2) is is possible to change the ownership % of this subsidiary
Submitted: 4 years ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 4 years ago.

bizlaw :

Hello, I will try to help you. Please remember I just report or interpret the law, so the outcome may not be what you hoped for. Your subsidiary is a separate entity so its activities cannot be attributed to the parent company as long as it juridical separateness is respected by the parent, in other words, it consistently follows its corporate procedures. To qualify as an S Corp subsidiary it must be 100% owned by the parent company. If I have answered all your questions, please rate my answer excellent as that is how I am compensated. If you have more questions, please let me know. If the answer was especially helpful you can provide a bonus.