LLC Formation and Management
With multiple LLCs, complete formation paperwork and pay a filing fee for each LLC. Maintain separate bank accounts and financial records for each. Getting a DBA allows operating another business under a name other than the LLC’s name.
Benefits of Multiple LLCs
LLCs protect businesses against personal liability. Making multiple LLCs offers benefits like limiting liability risks and attracting investors. One LLC method is branching out with DBAs instead of creating different LLCs.
Tax Considerations
LLCs can pay federal taxes as sole proprietorships, partnerships, S or C-corporations. Making S-Corp election means filing IRS Form 1553, while C-Corp treatment uses Form 8832.
Reasons for Multiple LLCs
Having multiple LLCs minimizes risks if one business fails. It’s common for diversification and offers liability protection for each business.
Series LLCs and Liability Protection
Series LLCs provide liability protection by separating each asset into its own LLC. It’s beneficial for managing multiple businesses while safeguarding against risks.
Managing Multiple Businesses
Running multiple businesses under a single LLC increases liability exposure. It’s better to have separate LLCs for each business to protect assets.
Parent LLC and Subsidiaries
Parent LLC protects subsidiaries by setting up separate bank accounts and isolating finances. Subsidiary members are not liable for parent entity debts.
Advantages of Running Multiple Businesses
Running multiple businesses under one company can be beneficial for diversification, branding, and growth. It allows creating a strong brand identity for each business and improving SEO rankings.
Taxation and Governance
Have a conversation with a CPA to discuss the best tax treatment for each entity. Draft proper governance documents like LLC operating agreements and shareholder agreements for each business.