Starting a Business: Insulating New Business from Parent Company

My question involves business law in the state of: KS

I have found that some seem to feel insulating a new company from a parent company is somehow shady, though it seems pretty common and just seem practical to do so. I am curious what elements may need considered for insulation or protection for a parent company and its assets from any liabilities in a new company? Around here, it seems some seem to setup as a separate entity and lease, rent, or even purchase products from the parent company.

I am familiar with at least one where there are actually 3 separate businesses under the same roof. The parent company owns the real estate. I am just not sure how they work the details in that.


The new business is not necessarily a high liability, but today everyone is looking for a handout and frivolous lawsuits are the standard. Even in a worst case, we simply cannot allow a new venture to hurt the parent company, even if that means not doing it at all.

Some have said even if I setup of a completely different company, different location, different everything, my other businesses could be at risk. That seems ridiculous to me...

Starting a Business: Insulating New Business from Parent Company