Multiple Businesses Under One LLC (Is This Safe? Should You or Not?)

If you have 2 businesses, you’re probably wondering whether you should operate multiple businesses under one LLC…

Or after successfully managing one LLC company, you would sometimes want to expand yourself into a second business venture while holding onto the first one.

This is especially true if you’ve caught the entrepreneurial bug and have several business ideas floating around in your head.

The question becomes…

can you operate several businesses under one LLC?

The simple answer is yes, you can operate multiple businesses under one LLC. However, just because you can do something doesn’t mean you necessarily should. By operating multiple businesses under one LLC, you expose one business’s liability onto the second business. So be careful about doing this.

Before you make a decision, if you have any questions about this, email me sam@mollaeilaw.com to discuss your current business and your future business ideas to determine whether operating multiple businesses under one LLC is right for you.

 

How to Structure Multiple Businesses

Legally, you have three options for structuring multiple businesses. Unfortunately, there isn’t one clear cut option better than the other two.

Each multiple business structure option offers benefits and drawbacks. Which option is right for you depends on the needs of your unique business ventures.

 

1.  Create Separate LLC For Each Business

Legally, you can form as many LLCs or corporations as you want.

While this option is straightforward, it comes equipped with a mountain of paperwork. An LLC for each business venture requires you to file separate forms including annual reports, meeting minutes, and taxes for each LLC

If you are strapped for time and looking to minimize your amount of work as the administrator, this is not the right option for you.

If you are in the business of real estate, this is the best option for you. If someone sues one of your properties, all of them become at risk if they operate under a single LLC.

An LLC for each business venture establishes a clear divide between each business in the event of a lawsuit.

 

2. Create One LLC With Multiple DBAs

The second option is to establish one company as an LLC and then file multiple DBAs (doing business as) registrations for each of your business ventures.

This structure allows each business to have its own name and branding while being protected by the main LLC (holding company).

Come tax time, you take the tax information from each DBA and file it in a single tax form under the main LLC.

 

3. Create One LLC With Other LLCs Under It

In this structure, the holding company houses the LLCs for each of your business ventures.

This setup is ideal for purchasing an established business or when an established business is going to fund a new business.

Taxes, legal implications, and paperwork can get pretty complicated for this option.

 

What To Do Next

Yes, you can operate multiple businesses under one LLC. But just because you can operate multiple businesses under a single LLC doesn’t mean you should.

Email me at sam@mollaeilaw.com to discuss the best way to structure your multiple business ventures today.