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.
Can I operate multiple businesses under one LLC?
For example, let's pretend a business owner has a trucking business incorporated as an LLC but after some time, he/she may also want to offer real estate services.
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 Dusiness 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.
There are 7 comments left for Can I Operate Multiple Businesses Under One LLC?
Mokgohlwa said: Monday, March 12, 2018Hi, what is the procedure of combining two or three different businesses?
HBS Staff replied: Monday, March 12, 2018Typically, 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/
R said: Saturday, December 2, 2017
I own parts of 4 restaurants, all S-Corps. Core partners are the same but a couple have additional ones. I am not listed as an officer in any of them. Should I force the issue? Does it impact my tax benefits? Or is my tax status affected for my umbrella LLC just formed now by me as only member affected at all? I will likely add equity positions in other industries over time under the umbrella LLC.
HBS Staff replied: Monday, December 4, 2017Thanks for reading our blog. Unfortunately, we can't answer your questions as they are out of our realm of experience. A tax professional and/or a lawyer would be better suited to help you.
Miles Fidelman said: Wednesday, November 1, 2017Is this not the whole point of Series LLCs? Has the status been clarified at all when it comes to tax treatment, and filing requirements when operating in other states notably MA?
HBS Staff replied: Thursday, November 2, 2017The Series LLC is treated as a single entity that can have different series or classes internally in the LLC. Each series can hold its own assets, have its own members and conduct its own operations yet remain insulated from claims of members, creditors or litigants pursuing the assets of, or asserting claims against, another series. Typically, each series is considered a separate entity for the purposes concerning the federal taxation of the entity. Many accountants or tax professionals are still not familiar with the structure adding to the many uncertainties that make it difficult to actually utilize a series LLC
If physically operating the Delaware Series LLC in MA, people typically qualify the entity there as a foreign LLC. The entire process to qualify the Delaware Series LLC there only takes a couple of business days on average.
Naimah Makor said: Friday, October 20, 2017I just applied for an EIN # to sell handmade crafts, but I also want to see products on Amazon. Do l need another EIN #?
HBS Staff replied: Friday, October 27, 2017Traditionally, the IRS will only issue one EIN per company. Generally, clients consult with a tax professional in order to determine if anything additional is needed to become an Amazon vendor, just to be on the safe side.
Andeywala said: Monday, July 24, 2017
Thanks for sharing up–to-date on this subject! I find it is very informative and very well written one! Keep up on this quality!
HBS Staff replied: Monday, July 24, 2017Thank you and we're glad you are enjoying our blog.
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