Can You Have Multiple Businesses Under One LLC?

It's a fact that you can have multiple businesses under one LLC. An LLC, or Limited Liability Company, is a flexible business structure that allows you to operate multiple businesses under one umbrella entity.

As an entrepreneur, there are several options for owning and operating multiple businesses. Here are some of the most common options:

1. Start each business as a separate legal entity: This means setting up each business as a separate entity, such as a corporation, LLC, or partnership. This allows you to keep the finances and liabilities of each business separate from each other.
2. Create a holding company: A holding company is a company that owns a controlling interest in other companies. You can set up a holding company to own multiple businesses, which can provide tax benefits and asset protection.
3. Franchise your business: If you have a successful business model, you can consider franchising it to other entrepreneurs. This allows you to expand your brand and revenue streams without having to manage each location.
4. Acquire existing businesses: You can acquire existing businesses that complement your existing business(es) or that offer new growth opportunities. This can be done through mergers and acquisitions or by purchasing existing businesses.

Running multiple businesses under one LLC can have its advantages and disadvantages. Here are some of the pros and cons to consider:

Pros:

1. Simplified legal structure: Instead of creating a separate legal entity for each business, you can operate all of your businesses under one LLC. This can simplify your legal structure and reduce administrative work.
2. Cost savings: You can save money on legal and accounting fees by only having to set up and maintain one LLC instead of multiple entities.
3. Shared expenses: By having multiple businesses under one LLC, you can share expenses such as rent, utilities, and office supplies, which can lower overall costs.

Cons:

1. Increased risk: If one of your businesses faces legal or financial troubles, it could impact the other businesses under the LLC.
2. Conflicting interests: The businesses under the LLC may have different goals or interests, which could lead to conflicts that are difficult to resolve.
3. Difficulty in obtaining financing: If one business under the LLC is struggling financially, it could impact the ability of the LLC to obtain financing for other businesses.

Structuring multiple businesses under one "Umbrella" LLC can be a viable option for entrepreneurs who want to streamline their operations and reduce administrative work. Here are some steps to consider when structuring multiple businesses under one LLC:

Choose a name for the "Umbrella" LLC

The name of the LLC should reflect the overall nature of the businesses you plan to operate under it.

Register the LLC

You'll need to register the LLC with your state's Secretary of State or another appropriate agency. You'll also need to obtain any necessary licenses and permits for each business you plan to operate.

Create a separate bank account for the LLC

This will help you keep track of expenses and revenue for all businesses operating under the LLC.

Draft an operating agreement

The operating agreement outlines the structure of the LLC, including how it will be managed and how profits and losses will be allocated among the businesses.

Ensure each business operates within the LLC's operating agreement

Each business should follow the guidelines outlined in the operating agreement to ensure consistency and compliance.

Set up separate bank accounts for each business

This will help you keep track of expenses and revenue for each individual business.

Use consistent branding

If possible, use consistent branding across all businesses operated under the LLC to avoid confusion among customers.

Keep accurate accounting records

Accurate record-keeping is critical to successfully operating multiple businesses under one LLC.

It's important to consult with a lawyer and an accountant when structuring multiple businesses under one LLC. They can help you ensure that you're properly setting up and operating the LLC and that you comply with all relevant laws and regulations.

DBA stands for "Doing Business As." It's a legal term used to refer to a business that operates under a name that is different from its legal name or the name of its owners.

A DBA is also known as a trade name, fictitious name, or assumed name. It's commonly used by sole proprietors, partnerships, LLCs, and corporations that want to operate under a name that is different from their legal name or the name of their owners.

How to Add a DBA to an LLC:

1. Check if your state allows DBAs for LLCs: Some states don't allow LLCs to file for DBAs, while others require additional filings and fees.
2. Choose a DBA name: The DBA name should be unique and not already in use by another business. You can check for name availability on your state's Secretary of State website.
3. File a DBA registration: You'll need to file a DBA registration with your state's Secretary of State or other appropriate agency. You'll typically need to provide the LLC's name, address, and other information, as well as the chosen DBA name.

How Many DBAs Can an LLC Have?

The number of DBAs an LLC can have is typically not limited, but it's important to keep in mind that each DBA must be registered and maintained separately, which can increase administrative work.

Benefits:

1. Multiple business identities: DBAs can allow an LLC to operate multiple businesses under different names and identities.
2. Brand flexibility: DBAs can provide flexibility to the LLC's branding strategy, allowing for targeted marketing to specific audiences.
3. Reduced costs: An LLC with multiple DBAs can save costs by only having to pay for one set of filing fees, licenses, and permits.

Drawbacks:

1. Administrative work: Each DBA requires separate registrations, licenses, and permits, which can be time-consuming and increase administrative work.
2. Confusion: Multiple DBAs can create confusion for customers and stakeholders, especially if each DBA operates in a different industry.
3. Legal liabilities: Each DBA operates under the same LLC, which means legal liabilities for one DBA can affect the entire LLC.

Overall, the decision to use DBAs for an LLC depends on the specific needs and goals of the business. It's recommended to consult with a lawyer and accountant to ensure that you're properly setting up and operating DBAs for an LLC.

Organizing multiple businesses under a holding company can have its advantages and disadvantages. Here are some benefits and drawbacks to consider:

Benefits:

1. Limited liability: A holding company provides a layer of liability protection to each of its subsidiary businesses, limiting the potential impact of legal or financial issues on the other businesses under the holding company.
2. Shared resources: By organizing businesses under one holding company, they can share resources such as legal, accounting, and administrative services, which can save costs and increase efficiency.
3. Easier management: A holding company allows for centralized management and oversight of multiple businesses, which can make it easier to manage and grow them.

Drawbacks:

1. Complex legal structure: The legal structure of a holding company can be complex, which can result in increased legal and accounting fees.
2. Increased risk: While a holding company provides some level of liability protection if one business fails, it could negatively impact the financial standing of the other businesses under the holding company.
3. Limited branding: Businesses under a holding company may have limited branding options as they must be structured in a way that aligns with the holding company's overall branding strategy.

A Series LLC is a unique form of Limited Liability Company (LLC) that allows for multiple "series" or divisions to operate under the same umbrella LLC. Each series can have separate assets, liabilities, and members while remaining part of the same LLC. Here are some benefits and drawbacks of a Series LLC:

Benefits:

1. Limited liability: A Series LLC provides liability protection to each series, meaning that the debts and liabilities of one series do not affect the others. This can help protect the assets of each series from creditors or legal action.
2. Cost savings: By operating multiple series under one LLC, you can save costs on legal and administrative fees associated with setting up and maintaining separate legal entities.
3. Management flexibility: Each series can have its own management structure, allowing for greater flexibility and autonomy in managing and operating each series.
4. Tax benefits: A Series LLC can provide tax benefits, as each series can elect to be taxed as a separate entity or be treated as part of the same LLC for tax purposes.

Drawbacks:

1. Regulatory requirements: Series LLCs are not recognized in all states, and those that do recognize them may have specific regulatory requirements that must be met.
2. Complexity: The legal structure of a Series LLC can be complex, which may require additional legal and accounting fees.
3. Uncertainty: The legal precedent for Series LLCs is still developing, which can lead to uncertainty about the legal status of each series and how they may be treated in certain situations.
4. Limited availability: Some states do not allow Series LLCs, which may limit the availability of this business structure.

Creating an independent LLC for each business can have its advantages and disadvantages. Here are some benefits and drawbacks to consider:

Benefits:

1. Limited liability: By creating separate LLCs for each business, the liabilities of one business do not affect the other businesses. This can help protect the assets of each business from creditors or legal action.
2. Separate accounting: Each LLC has its own bank account and accounting records, which makes it easier to track the finances of each business.
3. Increased flexibility: Each LLC can have its own management structure and can operate independently, allowing for greater flexibility and autonomy in managing and operating each business.
4. Branding and marketing flexibility: Each LLC can have its own branding and marketing strategy, allowing for targeted marketing to specific audiences.

Drawbacks:

1. Increased costs: Creating separate LLCs for each business can result in increased legal and administrative fees associated with setting up and maintaining separate legal entities.
2. Complexity: Managing multiple LLCs can be complex and require additional accounting and legal work.
3. Limited resources: Each LLC operates independently, which can limit the resources available to each business.
4. Possible overlap: There may be overlap in some administrative functions, such as insurance or legal services, which can result in additional costs.

Running multiple businesses can provide several advantages, such as simplifying your accounting and tax reporting, sharing expenses between businesses, and offering legal protection for each business under the LLC. However, it's important to note that you'll need to ensure that each business you operate is related to the LLC's main purpose and that you're following all local and state laws and regulations.

Form a new LLC today, and if you need expert guidance, complete the contact form or call +1 (307) 683-0983 to connect with our experienced paralegals. Your pathway to a diversified business portfolio starts here!