Divisions

[Batteries]

What is the name of your state? Tennessee

I am going to start a Corporation in Tennessee.

Can that corporation have several divisions that are run by the corporation?
How does the state and IRS know the divisions are operated by the corporation? And are not sole proprietorships.What is the name of your state?

 

[DStaub]

Yes, corporations can have divisions. Divisions are simply an internal organizational structure within a single corporation. They have no legal effect. The corporation acts as a single entity for filing all tax returns and is a single entity for purposes of honoring obligations of the group. For example if you have a division that makes lawn mowers and a division that makes Christmas cards, if someone is injured by a lawn mower that your mower division built, they can collect any resulting judgment from either the mower division or the card division, even though the card division had no connection with the accident.

In order to isolate liabilities of one line of business from the assets of another line of business, companies often choose to use subsidiaries rather than divisions.