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S-Corporation Businesses Can an S-Corporation run two types

S-Corporation BusinessesCan an S-Corporation run...
S-Corporation BusinessesCan an S-Corporation run two types of businesses? For example can one S-corporation operate as a real estate agent and a salesman for school products.Thanks,
JW
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Answered in 19 minutes by:
4/17/2017
Michael Gonzalez
Category: Business Law
Satisfied Customers: 543
Experience: Managing Member at Perez-Mena & Gonzalez, LLC
Verified

Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. This answer is given based on the facts provided above. Contact a local attorney to further discuss these issues. By continuing, you confirm that you understand and agree to these terms.

An S corp usually has a broad purpose when created (ex. "any legally purpose") and, thus, it technically can run two different businesses. However, this is not advisable. First, realtor companies require a license. Also, it is illegal for a realtor to share fees (or profits) with non-licensed personnel. Moreover, one "business" cannot shield itself from the other business' liability or debts. Also, it may be unnecessarily cumbersome to have the same tax ID number for both business. The list goes on.

While technically possible, it is not recommended. Rather, each business should be a separate legal entity with its own bank accounts, professional or business licenses, tax ID numbers, etc.

I would consult local counsel to protect your rights and interests for these corporate structures.

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Customer reply replied 8 months ago
Understand reasons for it not being recommended. I wanted to confirm times when you definitely cannot - as mentioned above, I should always check if someone has to be licensed for their industry what rules they are governed by.So another example would be the S-Corporation runs a small boutique retail store and salesman for medical devices. Neither one is required to have a professional license to operate. So legally they could combine but for liability reasons, one would not recommend it.Thanks,
JW

Correct. But keep in mind that your city/town/municipality will likely require business license to operate both. Just another reason I reiterate the recommendation to keep them separate.

Good luck.

Please do not forget to leave positive feedback by clicking on the 5 stars at the top of your page , as the experts are not employees of the site and get no credit for spending time with customers unless they leave positive feedback. Rating me costs you nothing. Thank you.

Michael Gonzalez
Category: Business Law
Satisfied Customers: 543
Experience: Managing Member at Perez-Mena & Gonzalez, LLC
Verified
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