Combine different types of business

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In some cases, it may be appropriate to combine different types of business. One such example is when a non-profit or economic association forms a limited company (a subsidiary) used for a distinct activity.

An association may wish to start a business that is not suitable to operate in the association, for example. The activity can then be put into a company that the as-sociation owns, but which has its own Board of Directors, own staff and own books (accounting).

This allows the association to spread the risks and streamline its activities. It also creates an opportunity to transfer or/sell (hive off), an activity, such as when the employees want to buy shares in the company.

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