Division or subsidiary of existing corporation

[teacup]

We are a small photography business currently wishing to expand to a different area. We wish to keep the expansion a part of the existing corporation but as a division or subsidiary of the existing corporation using a different name. Not sure how to go about this. Our other option is to just change the name of the existing corporation, but not sure which is the best choice and what it entails. Any advice would be greatly appreciated.

I expect you would want the new business held out to the public as a division rather than a subsidiary. Code §1563(a)(1) defines a parent-subsidiary corporation as "one or more corporations connected through stock ownership with a common parent corporation".

A division is usually just a part of your company doing business under a different name. This "other name" is a registered fictious name with the secy of state or a corp name that is not actually doing any separate accounting but just held out to the public. As an example when two corps are merged into one but continue to use both names as trade marks.

Your best bet is to set it up with the assistance of your attorney. Just my 2¢

[! Hulio !]

Yes, you could register a fictitious "doing-business-as-name" which would allow you as the original corporation to do business under a different name in the area in which you plan to expand, while keeping your existing legal corporate name.

Or, To form a subsidiary corporation, you would just form a new corporation at the state level with a different name and list the existing corporation as the sole shareholder.

Of course, you will first need a board resolution approving the formation of the subsidiary corp. From a management perspective, the directors of the existing corporation could be appointed as directors of the subsidiary corporation, if desired.

If you are planning to expand into a different state, you will need to either form a new corporation or register the existing company as a "foreign" (out-of-state) corporation in order to obtain authority to do business in that state. Again, if having a different name is important to you, you could also file a fictitious name for the "foreign" corporation in that state.