What is the best way to share essential employees between two sister companies?


I have one up and running Home healthcare (we'll call it Agency A)which provides skilled and non skilled services.
I have another start up agency which is only certified for non-skilled.(We'll call it Agency B)
These agencies are in two different cities.
I would like the up and running home healthcare which has staff to take care of the payroll and billing. The new start up agency would just act as a place to hire new employees and handle the paperwork that comes in.

I have not setup a parent company yet. I have been thinking of making the 1st Agency just a skilled agency and the second one would be a non-skilled only agency. That way when the Dept of Health comes in for their audits they don't apply all the strict rules for the non- skilled part which was under the skilled agency.

The employees working for the Agency A would take care of payroll and billing for Agency A and Agency B.
These employees would be then employed by a Parent Company (Lets say Agency AB)

Is this the best way of doing this?

Also our time sheets right now have Agency A logo and info. Would I have to have both the Agencies A and B logo on the times sheets for the field staff?

These are just a few of my concerns and I hope someone is able to get me insight as I have many more questions.

Thank you.

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asked Jul 12 '11 at 04:07
Faisal Ali
11 points

1 Answer


(Disclaimer, I'm not a lawyer, its best to ask one who works in your area)

As I see it for all the shared functions you would "logically" have a third entity (Practically you wouldn't to start with) that provided these support services (Agency C) and A and B paid an agreed rate per hour / month for these services.

  • As far as each employee and each customer is concerned they are working with the individual agency and they don't know anything about the other agency.
  • All the branding, marketing, employment / supplier / cusomter contracts and reporting would be done in the branding of the individual company.
  • The "arms length" contracts would be written between A and C and again between B and C. A and B would have very little to do with each other.
  • Agency C would have its own employment agreemnts with its "support staff". In practical terms you would have a "support services divison" of company A which as best as possible you make seperate so you can break it apart should you want to.
  • if they share technical staff then you have an agreed rate between A and B which works both ways and you reconcile the difference at the end of the month/quarter/year (what ever is suitable).
Protection of your companies.

You currently have the higher risk (continually audited) company doing the admin work. What happens is this company is shutdown, sued or disrupted? Will the other company suffer, be unable to process wages etc ... IF this is an real concern moving as much as you can into other companies and having an agreed, visible "arms length" contract is probably worth considering.

answered Jul 12 '11 at 09:53
Robin Vessey
8,394 points
  • Thank you for your response. So would agency C be a Holding or Parent company? – Faisal Ali 13 years ago
  • Well I could be the parent company ... to start with its simply a division of A. Seeing it employs people (thus assumes some level of risk) it could be a "side company" but that is really down to how likely you think it is that a law suit would target that entity and how much money your willing to spend to protect it all. Most of the time the A and B should be enough keeping the "support" division seperate as possible so it can be broken out. – Robin Vessey 13 years ago

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