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The Delaware LLC is by far the most popular entity type for most entrepreneurs building a startup.
As a result, people often wonder if they can operate multiple LLCs under one umbrella LLC.
These are two completely different types of businesses, so it raises the question of whether or not the owner can provide both services under one LLC. Part of the consideration is, naturally, wanting to avoid additional costs for maintaining another LLC.
The answer is yes--it is possible and permissible to operate multiple businesses under one LLC. Many entrepreneurs who opt to do this use what is called a "Fictitious Name Statement" or a "DBA" (also known as a "Doing Business As") to operate an additional business under a different name.
However, just because it’s permissible and possible to operate several different types of businesses under one company (LLC or corporation) doesn't mean you should, as there can be downsides.
For example, if a lawsuit is filed against any one of the businesses, the assets of the others could be at stake. The result is that you put yourself at a higher degree of liability risk.
Instead, many people opt to file a new LLC for each of their start-up ventures. This isolates the risk instead of spreading it around. There are, of course, additional maintenance fees, but these can be well worth it in order to protect your businesses.
If you would like more information or have any questions about forming your own companies, please contact us by phone (800-345-2677), Skype (DelawareInc), email or live chat. One of our knowledgeable business startup specialists will be happy to assist you.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.
There are 11 comments left for Can I Operate Multiple Businesses Under One LLC?Cynthia Clyde said: Monday, August 20, 2018
Is this only for the state of Delaware? Is the same true for Virginia?HBS Staff replied: Friday, August 24, 2018
Cynthia, this information is specific to the State of Delaware.Mary Kaeser said: Tuesday, July 17, 2018
I’m a contract RN and I have an LLC for that business. I’m thinking about doing a Nursjng Agency job as a second job. Is it ok to use the same EIN number for both places since the both are nursing? What is I pick up a third nursing job, would that also be ok to use same EIN?HBS Staff replied: Wednesday, July 18, 2018
If you are using the same company name for all your businesses, then you can use the same EIN; howerver, if you have different names for your businesses, you will need to apply for additional EINs. Every company must have its own EIN.Brandon Santee said: Thursday, May 17, 2018
Does a LLC and A DBA require two separate EIN numbers?HBS Staff replied: Monday, May 21, 2018
When you apply for an EIN, there is a line on the application for a DBA, so you can name your DBA and your LLC on the same form, thereby only needing one EIN number.www.overseas-medical.com/surrogacy said: Thursday, May 10, 2018
Excellent site you have got here.. It's hard to find quality writing like yours nowadays. I seriously appreciate people like you! Take care!!HBS Staff replied: Thursday, May 10, 2018
Thank you so much! We appreciate the compliment!Mokgohlwa said: Monday, March 12, 2018
Hi, what is the procedure of combining two or three different businesses?HBS Staff replied: Monday, March 12, 2018
Typically, a DBA is set up with the state and/or county that you are operating out of. Before setting up the DBA, your home jurisdiction may require you to foreign qualify there, if you have not done so already. We are not able to file the DBA, but we are more than happy to assist with the foreign qualification.
Your business is considered domestic to the state where formed, and foreign in all other States. To take advantage of the strong corporate law structure, Delaware is by far the most popular domestic choice.
If your business will have a physical presence by operating, hiring employees, banking or even holding an asset in a state other than its state of incorporation, clients will often qualify the business to operate in that state.
The foreign qualification process enables a company to transact business in a jurisdiction other than where it was formed. By failing to comply with local compliance issues, you may be putting the protection of your company at risk.
For further information on the DBA visit https://www.delawareinc.com/blog/dba-or-doing-business-as/
For more information on the foreign qualification process https://www.delawareinc.com/blog/what-is-foreign-qualification/