In walking around the city, it has struck me that when a small business – restaurant or other non-chain-store place – has some kind of government license, it is usually in the name of an entity with a name different than that of the establishment.
Two places I saw today:
Mie Yun restaurant’s alcohol license is in the name of JJC Georgetown Inc.
Garrett’s Restaurant has a sign that says “Jour et Noir (trading as Garrett’s Restaurant)”
Is there a reason why local businesses would prefer to use two different names for the corporate entity and the business establishment?
Probably the smaller restaurant/business is owned by a different company.
There are reasons for this. Let’s say you live in Amarillo, TX. You want to open a restaurant called China Sun. Problem is, there’s a China Sun in Brownsville, too*. Instead of changing the name of your restaurant, you can incorporate under a different name, and as long as no other company in Texas has the same name, it’s kosher.
Here’s another reason: my parents both wanted to start companies, but the paperwork for dealing with small businesses is so tiresome on a joint return that it was simpler to just create one family company and smaller branches within it to encompass my mother’s antique-selling business and my father’s programming enterprise. I think they needed state approval on the names of their little branches, but IIRC they could use the same tax ID number for both.
Based on what little I remember from working in business incorporation, that’s a general summation. I could be completely wrong.
*A city called Yellow and another called Brownsville. We got too much space, we ran out of interesting names, but Amarillo is in pretty yellow country and Brownsville isn’t exactly colorful either, but I digress.
It could also be that they changed the name of their business…but didn’t want to go through all the legwork of actually changing it.
As for the alcohol license, their could be many reasons for that. A few…you have to be incoporated to carry liquor, they may have a little tiny pseudo business set up just for that reason (we do) or they could be using someone elses liquor license.
Its pretty easy for a corporation to own another business. In doing so I could create Drach Inc, and run any number of businesses, storefronts, etc all unified by common ownership by Drach Inc rather than me. This way I can also effectively own 5-6 different businesses easily managed with just a couple bank accounts and one tax return for Drach Inc. Drach inc is also free to sell off its businesses without disruption of the parent companys financial structure, etc since Drach inc pays all the bills, hires employees, handles benefits, etc. In addition its incorporated providing some insulation from liability.
This is also sometimes a sign of a chain that doesn’t want to look like a chain. Sometimes people don’t like the big mega-chains, and would prefer to shop/eat/whatever at a small, locally-owned place. So the mega-chain just prints up a few different versions of the signs, napkins, and whatever, and opens up a bunch of places with local-sounding names.