- Legal vs tax
- Usually an LLC or corporation. Tax classification is independent of the 'operating' role in the graph.
- Liability
- This is where lawsuits usually land. Capitalize it; insure it; do not hide assets inside it 'for privacy'.
- Default federal tax
- disregarded
- Other federal options
- partnership, s corporation, c corporation
- Formation / maintenance
- Formation plus payroll, sales tax, and foreign qualifications where you actually operate.
- Public-record notes
- Operating companies have the most public footprints (licenses, workers' comp, marketplace seller pages).
- Succession
- Equity sits at holdco when the graph is designed that way.
- Investor fit
- Buyers diligence the opco even if they buy the holdco.
Disqualifiers
- Running personal expenses through the opco
Professional review: cpa, attorney, payroll, insurance.