incorporating a subsidiary company for each web app


My company (a Delaware C-corp) develops and runs a number of websites that will soon be offering paid accounts. What are the advantages and disadvantages of each website being its own subsidiary, and would it make more sense for the subsidiaries to just be LLCs or additional C-corps?

Advantages that occur to me include separation of liability, possibility of per-site investors, easier to have an exit on one site without selling the lot, etc.

Disadvantages might be more complex accounting, tax, legal fees, etc.

But would like to get a more experienced perspective on these issues.

Incorporation Corporate Structure Subsidiary

asked Feb 14 '11 at 12:56
309 points

1 Answer


The real advantage of separating them out is if you have partners for each of the sites. That way, you can compartmentalize the loss if one of the partnerships goes south.

The disadvantages are the paperwork and overhead, as you mentioned.

If you are really worried about liability, then you should separate them out. The good news is that you can always do that later by just selling the asset to the new company once it makes sense.

As an aside, you can still sell a site even if it's part of your broader company. What's typically done is that the asset is carved out and the everything is just sold to another party. That happens quite frequently.

answered Feb 15 '11 at 00:09
Jarie Bolander
11,421 points

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Incorporation Corporate Structure Subsidiary