Is it better to have multiple LLCs or DBAs? For liability protection purposes, it is better to have multiple LLCs for each of your businesses.
Taxation Considerations
The taxation process for LLCs becomes complicated over time. You have to prepare for K-1s for all members. Members’ personal returns should be filed with K-1s.
Business Structure Insights
I have a consulting business, a media/publication business, and an investment venture. A lawyer recommended that I form a C corporation for the media/publication to separate it out since I plan to sell it.
Cost Factors
In terms of cost, a DBA is cheaper than registering multiple LLCs. To establish an LLC, you can expect to pay a higher registration fee and recurring renewal fees. There is a registration fee and, depending on your state, a renewal fee.
Using DBAs
DBAs allow business owners to operate under a different name without changing the company’s name legally.
Holding Company Considerations
A holding company can be costly and generate a lot of paperwork.
Pros and Cons of LLC vs. Multiple DBAs
You can file a DBA (or multiple DBAs) if you’d like. You should consider if multiple DBAs are the most strategic way to proceed. While they allow your business to operate under multiple names, hosting multiple DBAs at the same time can also present some issues:
- Higher risk by having "arms" of the business in the same company.
- Complicated tax filing.
- Confusion for customers and vendors.
- Added costs for each DBA filed.
Separate Liability Protection
The most attractive element of owning multiple LLCs in a holding company is the separate limited liability it offers.
Business Structure Options
To operate multiple businesses under one LLC, you can create a Series LLC, use a DBA option, or establish a Holding Company. Consult a tax professional or attorney before deciding how to structure your businesses.
The concept of operating Multiple Businesses Under One LLC is a versatile approach to entrepreneurship. Seeking professional guidance and aligning with long-term goals will pave the way for success.
Can one LLC run multiple businesses? The answer is yes. However, if one business runs into financial or legal difficulties, the entire LLC is affected.
When Should a Business Use a DBA? DBAs allow business owners to operate under a different name without changing the company’s name legally.
A holding company can be expensive to manage. For Florida LCCs, the initial filing fee is approximately $100 with annual report filings at $138.75 per year. A registered agent in Florida will run approximately $100-$300 per business per year.
However, you should always consider if multiple DBAs are the most strategic way to proceed. While they allow your business to operate under multiple names, hosting multiple DBAs at the same time can also present some issues:
- Higher overall risk by having each “arm” of the business under the same company.
- Complicated tax filing.
- Confusion for customers and vendors.
- Additional costs for each DBA filed.