starting ONE or TWO companies?

[anya]

Hi everyone,

I really need some advice, as I am about to register a company, or two, depending on what advice I get. I am in the middle of setting up what appears as two very different businesses, but both share expenses for things like product photography, packaging and some of the materials that goes into the making of each. As for marketing, they are two very different products and so for this reason it seems reasonable to look at it as two separate companies. I'm thinking of all the options but can't seem to make my mind up as to which option is best. Two separate companies, or one 'parent' company with a 'child' company under its wings - more like a brand perhaps? Any advice would be greatly appreciated.

[Patrysha]

Without knowing specifically what you are doing or planning, it sounds like you have one company with two products - they may require separate marketing when launched, but since so many of the costs are crossed it sounds like it's one company. IBM doesn't have just one product, or Ford or Coke or McDonalds...or Proctor and Gamble or...you get the idea...

[Harold Mansfield]

One company. You don't need to have 2 companies just because you have two products or services. If GM and Apple can do it, I'm sure you can.
It's hard enough doing the taxes and paperwork for one, let along making it successful. No need to over complicate things right out of the gate.

[anya]

Great, thanks! So, I should think of a 'parent' name under which my products are sold then... Both product ranges have their own website with established names already, so would I just change the invoicing details? Say if product range A sold on website A, product range B sold on website B - I then send them receipts and invoices from name 'C'? I have names A and B in place already. 'A' sells pet products, 'B' sells clothing marketed specifically towards babies, children and their parents. The advice I have been reading is, what if you want to sell company/product range B? To separate them one would have to do the finances separately, but just as per both your advice, I really don't want to operate with two companies.

[Harold Mansfield]

Yes, run them as if they are their own entity because they are. No need to confuse customers. You can have as many brands as you want under one umbrella. As far as Uncle Sam is concerned, he doesn't care if your company has 1 website or 100, as long as the income is reported.

Of course I'm simplifying it based on what little you've said about the actual product, but if there is no financial or legal reason to separate into two companies like say, if each had different owners or partners, then I don't think it's necessary.

[anya]

Thanks! Any suggestions as to how to deal with the billing details in this case? Since the bank account associated with it would be only in the name of the registered 'parent' company for these two brands, would I write billing and details something like this: ?

Brand A
Brand A website
Registerered company name
Registered Address

Hope I don't sound like an idiot, but I just need to get this all really clear in my mind

[anya]

I have just noticed that Gap for example, operates under the company Gap Inc which covers Banana republic and other brands... So I guess I would have a similar 'About X' page from the bottom of each website I run.

[anya]

Plus they have a separate website about their 'parent' company Gap Inc - so I guess I would have to have that too... Ok its getting clearer in my head now.