As a result, people often wonder if they can operate multiple LLCs under one umbrella 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.
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 10 comments left for Can I Operate Multiple Businesses Under One LLC?Miles Fidelman said: Wednesday, November 1, 2017
Is 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, 2017
The 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, 2017
I 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, 2017
Traditionally, 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, 2017
Thank you and we're glad you are enjoying our blog.Milana Beschastna said: Saturday, January 28, 2017
Hi we are want to open the company and looking for the best option. The types of business are yoga teaching, selling on amazon, and web design and programming. How better to combine all that? Thanks a lotHBS Staff replied: Monday, January 30, 2017
The types of companies you open and manage are entirely up to you. Best of luck.Dinah said: Tuesday, December 27, 2016
We have a commercial real estate LLC for more than 5 years. Do we need a separate LLC if we are selling products online like Amazon and eBay? Or can we put this as an umbrella? But still need a separate LLC name? We need to know quickly.HBS Staff replied: Thursday, December 29, 2016
The sky is the limit with how you choose to operate your LLC. However, typically, if you have two businesses that are doing two completely separate things then often clients file separate companies so not all their eggs are in one basket, so to speak (liability, legal issues, etc.).
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