You can operate multiple businesses under one LLC. Create a “doing business as” (DBA) name, allowing you to operate an extra entity under a name besides the legal name.
The main benefit is running all businesses separately, but with one LLC’s filing duties. Have checks to separate names, different bookkeeping and identities for branding and marketing. All businesses share one tax ID and filing.
However, if one DBA has problems, the LLC is affected. Using one LLC and DBAs is easy and cheap to set up.
Limits and Risks of Having Multiple Businesses Under One LLC
While one LLC offers administration and filing shortcuts, the risk increase usually isn’t worth it. LLCs limit liability. Different LLCs protect assets and income, isolated from other businesses. If combined in one LLC, they’re at risk from each other.
Is it better to have multiple LLCs or DBAs? Getting a DBA allows you to operate another business under a fictitious name other than the name of your LLC. You can use individual business names, accept payments, and market your businesses individually. You will just need to pay your annual LLC fee for one LLC (and not for each DBA). You can report income earned from each DBA in a single tax report as the LLC owner. Having multiple DBAs will not protect the assets and income of each DBA from the other DBAs. If one of your DBAs gets sued, all other DBAs under the LLC name will be liable. For liability protection purposes, it is better to have multiple LLCs for each of your businesses.
Strategic Considerations for Multiple DBAs
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.