Filing for dual corporations can protect your domain business

Monte: Now this fourth point, about the dual corporations, that’s one of the points I’ve never heard before.

Stephen: It’s something that I always like to do. Whenever I set up systems, I usually like to set up multiple corporations where you have one corporation that’s going to own a lot of the actual assets. For instance, if we’re talking about domains, you put all the domains in one corporation and then you turn around and license it to a second corporation. As long as you treat both corporations as really separate corporations, with the licensing agreement and a certain amount of money coming from that licensing agreement and no co-mingling of funds. If somebody turns around and says I’m going to sue this company that’s using this domain, then they’re going to be suing a company with no assets. Yeah, it’s possible to lose and these things happen. Then they’re not going to be able to get anything for their loss. They’re going to be going after an empty bucket. Now obviously they’re going to try to pierce the corporate valve but one that makes things and awful lot harder. Two, if you’ve done your homework and acted according to the standard corporate laws, it’s going to be very hard for them to do so because you’re going to say you know the different corporations, this corporation owns all the assets and that corporation is using them accordingly. The corporation that owns the domains, well it hasn’t done anything wrong. It hasn’t used the domains in any way whatsoever.

Monte: Right, right. That’s a good strategy. You generally set this up for your clients?

Stephen: Most of them.

Monte: Well we’ll definitely give your e-mail address and some more information about that as well. I think what we’re going to do is break for another commercial here coming up. Guru, you with me? When we get back, Stephen if you can get a link or two for anybody that offers that litigation insurance, that’d be great. Tell me what it is when we get back.

Commercial Break

Monte: Hello. Welcome back to domain masters. A lot of questions coming up on the, on both of the chat rooms so I’m going to try to get some of those answers. Stephen, were you able to find what site?

Stephen: I found one of the companies that I know about. I’m going to give it to you but I’m not saying they’re better than any other company.

Monte: No, that’s understandable, just one as an example and maybe we can do some research and post some more later on in the week or whatever. Or if anybody wants to send you an e-mail or me and e-mail where they can get that.

Stephen: Infringeins . . . i-n-f-r-i-n-g-e-i-n-s.com

Monte: That’s i-n-f-r-i-n-g-e-n-s

Stephen: g-e-i-n-s

Monte: g-e-i-n-s.com

Stephen: Right.

Monte: And they have litigation. I’m just putting it on the board here on litigation insurance.

Stephen: They’re calling it intellectual property insurance services. It’s one of probably a million insurance companies out there.

Monte: Right. I’m sure. We’ll try and get some more and I’ll have some people e-mail you and stuff because I’m sure they want to do that. People were asking about the dual corporation set up. What does that typically cost to do something like that?

Stephen: You’re probably talking about $1800 to $2500 depending on, I mean remember that’s just one way of doing things. There’s a lot of other things as things get more complicated you can use four or five corporations. It completely depends on if you have employees or if you don’t have employees. It depends how much intellectual property you have, how many domains you have, how things should be set up. Once again, you’re going to deal with this on a case by case basis. Usually you’re talking about $900 per corporation you’re setting up. You’re talking about two corporate set-ups then you’re probably setting up a couple of licenses in between.

Monte: Oh, okay, great. So that’s what the extra expense is for. So you can go set up your own corporation for $150 to $200 but this is going to be a little bit more complicated because you’re basically licensing from one to the other and the agreements you have to put together in order to do that.

Stephen: Right. In all honesty, people have come to me with multiple corporations and said just set up these licensing agreements for me.

Monte: Ok, okay great.

Stephen: You know, that’s the point, you do it yourself and obviously it’s a lot less expensive.