At my new company, each location is a separate LLC for legal liability reasons. Currently, each location is a separate company in our
Accounting Structure for Separate Legal Entities
Answers
The key is to maintain an "arms length." I was involved in a structure with 30 joint venture companies that used one central Accounting back office which I managed. The central Accounting was part of a set of services that the joint ventures used from one central company. For that we received a
Leslie,
If I read your phrase "set-up each location as a class/location/division within one company" right, the challenge you may face is that the Retained Earnings account would at that 'company level and you would have to manage each subsidiary's legal retained earnings manually (may be relevant if you sell off any location). That can be a real pain.
It gets further complicated if any subsidiary has different shareholders (sometimes the location has its founder/doctors as minority shareholders). That means you need your consolidation module/package to handle minority interests for you.
Choosing the right software to handle the centralized processes, as Regis identifies above, helps reduce the duplicated effort. And standardizing those processes for the locations is key to making it work.
Regards
Len
1
Great points Len. To clarify, currently all locations are owned by the same equity group with no minority interests, and retained earnings could be maintained at the Company level (locations are contracts not actual physical locations). In the future, we may have partial equity interests; thus, I would also be interested in software suggestions. We currently use
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