Oklahoma corporation

If I start an additional business do I need a new company?

Have you ever wondered why some companies that have multiple lines of business have multiple legal entities to operate them?
Why does one company have a holding company that owns 14 different Oklahoma limited limited liability companies?
The answer may be important to your Oklahoma company as you expand and grow.

The General Philosophy

My general philosophy on adding new business is if it is a business that is distinct from the existing business and/or presents new types of liability, the new line of business should be operated under a new legal entity.

Primary Purpose

The primary purpose of this legal separation is to attempt to keep the legal liabilities created by each business separate from the other business. For example, if a separate line of business such as roofing is sued due to an employee accident, if the new business is legally separate from the existing business, it much harder for the plaintiff in the lawsuit to involve the existing business in any way.


This is an advancement of the concept of using a legal entity (Oklahoma corporation or Oklahoma LLC) to separate your business from your yourself. A sole proprietor typically incorporates so that the business is operated legally separate from themselves. That is, the legal entity creates a wall of separation between the business activity and the owner’s individual assets. A claim against the business should not normally lead to the liability of the owner.

Key consideration

One thing to consider is whether you new business is simply a additional “line of business” or whether it is a new business with its primary tie to the existing business being common ownership.

A new line of business or new business unit may not require a new legal entity. While a new business very often requires the creation of a new legal entity.

Example from your friend in the the digital age

Cox Enterprises is an example of this type of legal separation for distinct business. Cox Entrprises is diversified media conglamorate that owns newspapers, dealertrack technologies, television stations, radio stations, Cox Communications, Manheim Auctions, Autotrader, Kelley Blue Book,Savings.com and Valpak. Many of the seperate lines of business are owned by separate entities including Cox Media Group, Inc., Cox Advanced Services Oklahoma, L.L.C. and Cox Cable Authorized Retailer, Inc.

A practical example

A business owner could create a new entity for the new business and still use the existing business for branding purposes. You could do this through a basic licensing agreement between your existing entity and the new entity and a shared services agreement. Additionally, you set up a holding company as the entity on top and then operate each business under entities owned by the holding company. You would create two new entities to carry out this plan and then set up one as Entity 1, in which you would own 100%, and then Entity 2 and Entity 3, which would each be owned 100% by Entity 1.

Questions to ask yourself

A couple of questions to ask yourself to determine whether you need a new legal entity:
  • How will new business be connected to the existing business?
  • Will new business use the same name as the existing business?
  • What other ties will the new business have to the existing business?
Posted by Shawn Roberts in Blogposts, Business Law, Oklahoma limited liability company

FAQ — How much does it cost to form an Oklahoma corporation?

Broder Canning Company, Lethbridge And Taber Operations

This is one of the questions I hear often, particularly because services like Legal Zoom make so much hay with pricing. So I thought to myself: Why not share my pricing, plus what you actually get for the price?

While this isn’t the price in every case because some cases are different, this scenario covers most situations.

My price for a forming an Oklahoma corporation is typically $800.00. What do you get for this price?

Certificate of Incorporation.    The Certificate of Incorporation contains the basic information about the corporation:  Name, Resident Agent, and the initial directors of the company and are filed with the Oklahoma Secretary of State.

By-laws. The By-laws are the most important document of the corporation.  They govern the management of the corporation, the allocation and distribution of profits, duties of officers, directors and shareholders, voting, procedures for transfers of stock and various tax related matters.  The by-laws can enhance the asset protection features of the corporation, or it can weaken them depending on the provisions.

Meeting Minutes. Meeting Minutes memorialize decisions made by the directors and shareholders of the corporation, both to get the company going and to maintain it each year.

Tax ID & Elections. In most circumstances, a corporation requires a Tax ID Number from the IRS.  Essentially, it is the equivalent of a social security number for the corporation.  Bank accounts should be opened with this Tax ID and all corporate business should be conducted under this Tax ID.

Stock Certificates/Transfer Ledger.   Stock Certificates manifest ownership in the corporation.  A corporation does not have shareholders until shares of stock are issued.  That means that there must be some manifestation of intent to issue the shares of stock, either in the Meeting Minutes or in the signing of the Certificates.

Standard Non-Disclosure Agreement. A fundamental necessity for any company seeking to protect its intellectually property, this battle-tested Non-Disclosure Agreement provides a foundation for protecting private and confidential information.

Standard Employment Agreement. It pays to have it in writing with your employees. This way, both the employer and the employee know what the deal is. You can do this with the Employment Agreement which has been tested and refined in many scenarios.

Standard Independent Contractor Agreement.  Most small businesses use the services of independent contractors.  As with the employment relationship, it is helpful to document the Independent Contractor relationship in writing.  You can achieve this with the simple Independent Contractor Agreement I provide.

Free Telephone Calls. As you get your business up and running, you need some more guidance on legal issues. I am happy to provide some help by talking to you on the telephone for no charge, for the first six months after we set up the company.

Posted by Shawn Roberts in Blogposts, Business Law

A mind map for forming an Oklahoma not-for-profit corporation

A few months ago I wrote about forming an Oklahoma not-for-profit corporation, starting with Oklahoma and then securing recognition from the IRS that the corporation is tax exempt. In that post, I mentioned a checklist and offered a copy to anyone who wanted it. The checklist has now morphed into a mind map and, again, anyone who wants a copy is welcome to have it.


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Posted by Shawn Roberts in Blogposts, Business Law

The steps for forming an Oklahoma not for profit company (tax exempt)

The term “not for profit” is used so loosely that sometimes the lines between a company that has no profit motive and a company that the IRS has determine is tax exempt, gets blurred. Anyone can start a company that is not for profit. But there is substantially more work and focus required to start a company that is not for profit and actually get the IRS to recognize it (meaning, for one thing, that donations are tax deductible.

In helping people put together companies like this, I have created a list that broadly outlines the steps to consider when creating an Oklahoma not for profit company.  If you would like a copy of the list, please let me know by email at sjr@shawnjroberts.com and I will email it to you.


Posted by Shawn Roberts in Blogposts, Business Law

5 steps to prevent your Oklahoma corporate veil from being pierced

What does it mean to have your corporate veil pierced?

The veil of limited liability is the legal protection a person or people get when they form an Oklahoma corporate or limited liability company. The company has a separate legal existence, it can own property, make contracts and generally conduct business.

When you hear the phrase “piercing the veil” that means a court is considering taking the protection you receive from having the corporation or limited liability company. If it happens, all of your personal assets could be at risk.

There are certain things that you, as the business owner, can do to maximize the chances that your shield of limited liability will hold up. Read on to find out the steps.
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Posted by Shawn Roberts in Blogposts, Business Law