What Do Older Sisters Mean When They Talk About Their Younger Siblings?

Many small business owners, especially those who are self-employed, are often very surprised to discover that one of the corporations owned by their sister company is not under any type of control or LLC (for instance, sole proprietorship). By definition, sister corporations are one or more separate companies, usually owned by a parent corporation. In a sister corporation, the sister companies share equal shares of the parent firm’s assets. The mother corporation is generally treated as the surviving corporation in any death, bankruptcy, or separation proceedings. The mother corporation will then administer the company and provide directions for the operations of the company.


It is often necessary, when setting up sister companies, to determine whether the subsidiary will continue to be treated as a passive entity or will continue to be treated as an active corporation. In a passive entity, the shares of the parent companies do not change ownership. The shareholders are generally not entitled to vote and only one dividend per year is received. Shares of the sister companies can be bought and sold only by the proprietors of the shares. There are certain requirements that must be met before shares can be purchased or sold.

For many years it was necessary to appoint a sole proprietor for all of the subsidiary companies. A sole proprietor generally is able to write-off his dividends or other gains. However, in order to effect a distribution of income to the parent company it is necessary for the sole proprietor to also sign an agreement. In most cases, the IRS requires the sole proprietor to designate an estate planner or trust to manage the distribution of the property. A large amount of time is spent choosing the right people to make these decisions.

There are some states that allow the transfer of voting rights from one sister company to another. However, these states require the approval of the Secretary of State and may be subject to litigation. There is currently a limitation in relation to transfers of more than 50 percent of voting power from sister companies to one parent company or another.

Transferring land or other assets is usually much easier for younger siblings than for older ones. Most states allow for the transfer of real estate between sisters. This is particularly true with properties located within the state. In many cases younger sisters will have to use a process called “assignment of title” to meet the legal demands placed on them.

Some older sisters may find inside jokes from their younger siblings to be funny. In many cases, the inside jokes may include the same or similar names or even the same or similar words. This does not always mean anything. Most people who pass along inside jokes that contain inside jokes mean no harm.