Columbiana, AL asked in Business Law for Alabama

Q: Can I own a construction company, and a rental company?

The construction company will rent everything from the rental company; Tools, company vehicles, job trailers, etc. The rental company will only suppy the construction company. Would doing this fall under embezzlement?

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1 Lawyer Answer

A: There is nothing inherently illegal about owning one company that rents equipment to another company you also own. In fact, this may be a useful structure to limit a creditor's ability to go after the equipment. Although, you must properly account for and pay taxes on the transactions. You also must maintain corporate records for both businesses.

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