Opening Second Business

1 Answers. Asked on Jun 19th, 2015 on Business Law - Colorado
More details to this question:
I currently own a S-Corp sports bar/restaurant. There is one investor in my current company. I am looking to open a second location under an "umbrella" corporation which will contain my current business as well as the new business. I am curious as to if my current investor has any say/writes towards the corporation I am looking to start and/or if there is a way to ensure they are only considered an investor toward my current business and not every business which falls under the corporation. My second question lies in business loans. Am I able to take a loan out/use my current business as equity to start a second business (an Irish Pub)?
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Answered on Jun 29th, 2015 at 12:16 PM

You have a few big issues here that you should discuss with a competent business attorney.  Unfortunately, the answers will all require a detailed review of your current business documents.  You need to make sure that you are not personally using a corporate opportunity in starting the new business, and confirm that your current shareholder agreement or other governing documents does not give your current co-owner a right to participate in similar business opportunities.

As far as the loan goes, you may be able to pledge your equity in the first business to fund the second, unless it is restricted in your bylaws or shareholder agreement.

The simple answer is to find a local business attorney and meet with them to discuss your issues.

Good luck!

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Business Law
Beginning on the day a new business is launched, it will encounter a host of legal issues. From selecting the optimal business structure to negotiating contracts, from ensuring that the company's name doesn't infringe on another business's intellectual property to hiring new employers--almost everything that small business owners do touches on some aspect of business law. As a company owner or manager, your focus should be on successfully running and building a business. A law firm that focuses on business law will have attorneys who have a broad cross-section of experience on the myriad legal issues that affect all businesses, large and small.
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