You own a few companies, when do you call them a Group?

Hello, i'm from Europe. I'm a Founder and CEO of a 4 small companies, each one is engaged in entirely different business sectors. I'm about to start 2 new companies very soon.

My company structure is a bit like Richard Branson's. Each company operates for itself and it is not related to any of the other companies. Each company has a management team which team reports to the COOs of the companies and to me. The common thing is that each company name starts with my brand name.

If my brand name is Kavkaz, can i say that i have a group of companies called Kavkaz Group? I can see that Virgin is a group of companies and i think the model of RB is like the one i described.

Here is a definition from wikipedia.
http://en.wikipedia.org/wiki/Corporate_group

My structure is not as the described one, but i think Virgin's structure is not either.

What do you think? I'm planing to register a new .group domain as soon as it is out.

 

I wouldn't be surprised if there are hundreds of Kavkaz companies / groups in the Russian Federation and particularly in the Kavkaz region. Why would you consider choosing something so commonly used? I'd suggest brainstorming a name that will be unique.

From what I understand if several companies are owned / regulated / controlled by the same person or group of people they can merge those companies into one group. Those things are done for 1. convenience purposes and 2. tax purposes. And, in some cases, it just makes sense to run several companies as one large conglomerate.

 

Congratulations on your success. This is a great problem to have.

In my experience, a "Group" company is usually the legal corporate owner of the individual companies that comprise the group. Another term for it would be a "Holding" company. There can be tax benefits if structured correctly, but my understanding is that the primary purpose of a "Group" company arrangement is so that the individual companies in each group can focus exclusively on their business while the "Group" company focuses on the entire portfolio from an overall investment strategy perspective. This top-view perspective can be quite different from one in the trenches of an individual company because, for example, a business that is not "doing well" might be allowing a different business in the portfolio to do extremely well because it provides a low-cost solution or something like that. It can also work in the reverse where a company that is doing well is not meeting the goals of the portfolio and is sold off despite its success (it happens.)

This approach can also involve a move to centralize/optimize certain company functions that would otherwise be redundant in all four companies. For example, the Group/Holding company could handle HR for all of the four companies you have. Or perhaps some other administrative functions. Economies of scale would more buying power with certain common purchases to all the companies.

You really need to talk to a CPA and a tax attorney about setting up the appropriate corporate structure for the Group/Holding company and how to optimally integrate the existing companies under it if you do decide to proceed in that direction.

 

I like the term "Development" as well for example I could be A.G. McCall Development Inc. With all my business/blogs/websites being DBA's

al

 

The thing is that i don't want to merge those companies into one. I own those companies and each one operate as a single unit, the common thing is that i own them and in front of each name is my brand name (it is not Kavkaz, it is Urgun, just gave it as example).
The companies are:
Urgun Agriculture
Urgun Tech
Urgun Canning
Urgun Properties

I like how Richard Branson thinks. Each of his companies operate as single unit as well or at least this is what it is written in his first book. It is not related to any other of his companies, except with the brand name. This way the companies are much more protected and the failure of one can't take the others with it.

So, what i want to know is, can i present my companies as Urgun Group or Urgun group of companies? I think this is a matter of understanding. My structure is not as the described one for Group of companies, but when you see it, it is a group of companies beginning with a brand name, a several companies which can be called a group of companies in a way to explain there are more than one or two, not in the meaning of the legal term Group. I think Virgin is thinking that way when they call them self a Group.

 

From a pure branding (not legal or tax) perspective, you can call your "group" of companies whatever you would like. You own them all, so there are no questions about misleading or misidentifying these businesses. I am not sure what benefit will derive to the companies, but it may enhance your personal brand which could aid in acquiring or starting new companies. Good luck with all of this; I hope that it works out for you.

 

I agree with jrbiz. From a branding perspective you're more than welcome to call yourself a Group or Network (lots of people do it).

It sounds like each company has revenue, employees as you mention separate managements etc so from a tax / legal perspective, I'd consult a professional local to you to ensure you get the best advise.

 

@Alex - Arvixe Yeah I agree.

Honestly, a forum is not really the place to ask such a question, especially if you're are running multiple companies w/ multiple employees for each. Frankly, I'd assume you would have a lawyer you could turn to for advice...at the least..someone who gets paid for their advice .