Running Multiple Businesses under One LLC
Yes, you can operate as many businesses as you want under one LLC.
Series LLC vs. Multiple Businesses under One LLC
When is a Series LLC better than running multiple businesses under one LLC? A Series LLC provides the same benefits as a single master LLC with multiple LLCs organized underneath it but enjoys greater flexibility and simplified administration.
Operational Considerations for Multiple Businesses under One LLC
It’s simply a registered name for the business. The main advantage of having multiple businesses under a single LLC is that you can run all your businesses separately, but with the filing requirements of one LLC.
Two or More Businesses under One LLC
You can run two or more businesses under one LLC by either: running all the business activities under one LLC name, or registering DBAs (“doing business as”), also known as Fictitious Names.
When to Consider Separate LLCs
However, series LLCs enjoy greater flexibility and simplified administration. Having one LLC to house multiple separate business entities as a series LLC will result in the holding company and operating entities being formed within a single LLC.
Optimal Structures for Multiple Businesses
Most of the businesses opt for series LLC to operate multiple companies. However, it is quite a new structure for business operations and thus involves various hurdles. So what is the ultimate solution? Separate LLCs.
Considering Risks and Liabilities
While operating both businesses under one LLC may offer you some shortcuts, in the long run, these shortcuts are probably not worth the increase in potential risk.
Benefits of Separate LLCs for Each Business
Using the second method, you form a main LLC or corporation. Next, you file DBAs or fictitious business names under the business entity for each of the business ventures the company owns.
Complexity and Protection
This is the most legally complex way to have one LLC on other LLCs. However, it also offers businesses the most protection from liability. The holding company itself provides limited liability to the other LLCs, it manages.
Considerations for Liability Protection
Many business owners choose to form a new LLC for each of their business ventures.
DBAs vs. Multiple LLCs
Is it better to have multiple LLCs or DBAs?
Taxation Considerations
The taxation process for LLCs becomes complicated over time.
Business Formation Insights
I currently have multiple businesses established and wanted to get some insights on the best possible business formation on either forming multiple LLCs, establishing DBAs, or forming a holding LLC to support all.
Cost Comparison
In terms of cost, a DBA is more cost-efficient than registering multiple LLCs.
When to Use a DBA
When Should a Business Use a DBA?
Operational Considerations
A DBA is also a good solution if you already run a company, including an LLC.
Management Costs
A holding company can be expensive to manage. It can also cost you a lot to keep up multiple LLCs.
Strategic Considerations
You don’t have to file a DBA to run multiple businesses under one LLC, but you certainly can file a DBA (or multiple DBAs) if you’d like.
Concerns with Multiple DBAs
- 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.