Here is a good question from Dan and Elizabeth.

Q: Can a hold company hold different types of businesses?

A: The simple answer is, "yes." A holding company can hold any type of business with the exception that an S corporation can only be held by individuals, certain trusts, or another S corporation (and that ownership must be 100%).

The better question is "Should a holding company hold different types of businesses? The answer to this question is - Not usually. For example, a holding company should never own both operating companies and rental real estate companies. One holding company for real estate investment and one for businesses. Multiple operating companies can certainly be held under the same holding company.

This depends also on the type of business and the risk associated with the business. The best answer of all is to meet with a qualified Tax Strategist and work through the best types of entities and holding companies for your various business and investment endeavors to create a long-term, cohesive tax and asset protection strategy.

Warmest regards,

Tom