Allowing Other People to Use the Name of your Company as their Own

February 19, 2007 | By | Reply More

QUESTION ON Allowing Other People To Use Your Company Name

Hello, My husband owns a corporation and would like to add two men into his corporation. He doesn’t want them to profit from his business, but he wants them to be able to work under his name and license, he is a Drywall Finisher and Painter. How would he do this and how much would it cost? Please let us know as soon as possible. Thank you

– Jenny Lee




ANSWER

Dear Jenny,

If your husband does not want the two gentlemen in question to profit from the corporation, then that would obviously cancel out the possibility of bringing them on as shareholders. If the goal is to bring them on board to provide services on behalf of the corporation, working under the corporation’s contractor license, then this would indicate that their role would be that of employees; therefore standard hiring practices and the usual costs associated with hiring and maintaining employees would apply

If, on the other hand, you mean to say that your husband wishes to allow the gentlemen to provide services to their own clients under his corporation’s contractor license without compensation from the corporation, then this would likely be impossible, as most states do not allow the transferability or “sharing” of contractor licenses. With consumer protection in mind, most states impose strict eligibility requirements for the issuance of contractor licenses that must be complied with across the board; otherwise, unsuspecting consumers might hire unqualified, unlicensed individuals to provide contracting services–to their detriment–and this would defeat the purpose of having state-issued contractor licenses.

From the point of view of your husband’s corporation, allowing unlicensed individuals to work under the corporation’s license as a “courtesy” rather than as employees would present an unwanted liability if anything were to ever go wrong with a contract; likewise, doing so would put the corporation’s contractor license at risk of revocation if it were to ever be discovered by the issuing state agency. .

Chrissie Mould

Recommended Resources on How to Form LLC:

Chrissie Mould

Chrissie Mould has over a decade of experience in business administration and startup business consulting. She has helped launch companies in multiple industries and has managed corporate administration and governance for public and private companies. She is an incorporation specialist with MyNewVenture.com LLC. The company provides low-cost incorporation services to entrepreneurs and small businesses.

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Category: Intellectual Property, Q & A

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