Creating Divisions for your LLC, Corporation, or Business

On December 9th, 2011, posted in: Business Structure by Andrew Legrand

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A few people have asked how they can create a division within their business. A division acts as a child to a larger parent business, but isn’t a separate legal entity itself. This contrasts with a subsidiary, which is a company that is wholly or partially owned by another company. More on that later.

Organization Chart with 6 Business Divisions

This chart represents a company with 6 divisions

A division is essentially a branch of the main business. The main advantage is that it allows a business owner to keep a separate set of accounting books to keep track of its own revenues, expenses, and profits. This allows the owner to see which divisions are performing the best and which divisions need to perform better, and can be helpful if there are any future plans to sell the business. The division may also operate under a separate name from the parent company, which needs to be filed with your local parish government.

 
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