Why Register Two Separate Businesses?
- A business owner or entrepreneur who establishes businesses in different areas will often register two separate businesses. For instance, someone who opens an online or brick and mortar bookstore may establish a separate delivery service, to deliver the books she sells along with other merchandise. On the other hand, establishing two locations would not warrant establishing separate businesses.
- A business can take on a number of legal structures. Businesses which have different legal structures would by necessity be registered as separate businesses. For instance, if someone establishes a sole proprietorship and later goes into a different business with a partner, the partnership or would register the second business separately. The same would apply if a single business owner were to register one business as an S-corporation and a second business as a full-fledged corporation.
- Not-for-profit agencies which have branches which perform advocacy work or other activities which are not eligible for nonprofit status will often spin off the advocacy arm of the organization as a stand-alone, tax-liable entity. This allows the main organization to retain its nonprofit status. An organization would make a similar distinction between its not-for-profit main service agency and its profit-generating retail outlet.
- In 2008, America Online (AOL), split into two separate companies the onlne website content company shed the struggling internet service provider (ISP) to maximize profits. The move had been anticipated for quite some time, as the once-dominant ISP had steadily lost market share in the early years of the 21st century. Jeff Bezos, chief executive at online bookseller Amazon.com, stated that Kindle books would become a separate business from Kindle Readers, with plans to expand the reach of Kindle books to other electronic reading platforms.
- Sometimes separate businesses are the result of the dissolution of a partnership or a corporation. In such cases, the separate businesses would result from the dividing of the assets between the partners, with each partner forming and registering a separate business. This would most likely occur with a business partnership or with a business jointly owned by a married couple going through a divorce.