Operating Entity
What does it mean
An Operating Entity is an entity primarily responsible for owning and managing the operations that sell goods and/or services. It is often associated with a Real Estate Holding Company, dividing a business's assets between the two entities to protect them from potential liabilities.
Why does it matter
The reason for structuring a business with an Operating Entity and Real Estate Holding Company is to protect assets from liability. If the operating entity faces a lawsuit (more likely as it sells products/services to the public), the real estate remains safe, since it is owned by the separate real estate holding company. Community Bankers should grasp the importance of various corporate structures to shield assets from liability.
Other Relevant Terms
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A bit about me
Greetings! I'm Clay Sharkey, and there is nothing I like more than assisting others in achieving their goals. I firmly believe that by enhancing a banker's understanding of their customer's' business, they can provide superior service. This superior service, in turn, leads to stronger relationships for the bank, improved performance for the businesses, and better experiences for our communities. Win-win-win.
