Can an LLC start another LLC [FAQs]

Last updated : Sept 20, 2022
Written by : Pete Ovitz
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Can an LLC start another LLC

Can One LLC fund another LLC?

Yes, an LLC can own 50% of another LLC - it can also own 100% or 1%. This is referred to as a parent or holding company which is designed to invest in other companies. One LLC can fund another LLC either via an equity investment or a loan.

Can two LLC own another LLC?

Yes. There are two ways in which an LLC may own another LLC: An LLC may own multiple, single-member LLCs—this is called a holding company structure; or. An LLC may serve as the master entity and own a series of LLC cells, should state statute offer this option.

Can I start 2 LLCs at the same time?

Many business owners choose to form a new LLC for each of their business ventures. In most states, there are no restrictions on how many LLCs an entrepreneur may create.

How do I have multiple businesses under one LLC?

Another way to structure multiple businesses under one LLC is to set up a holding company. Under this option, you would create separate LLCs for each new business venture and “hold” them under your primary LLC. This arrangement is also referred to as an umbrella company or parent company.

How many LLCs can you have?

Making multiple LLCs, in fact, is perfectly legal; there is no limit to the number of LLCs one person can register. On the other hand, it's more paperwork than you might otherwise need to do. Taxes become individual taxes for each LLC, rather than one larger aggregate whole.

How do I run multiple businesses?

  1. Choose Projects Wisely.
  2. Share a Location.
  3. Schedule Your Days.
  4. Track Your Time.
  5. Leverage Your Assets.
  6. Create Reports Regularly.
  7. Hire the Right People.
  8. Learn from Past Mistakes.

How do I add another business to my EIN?

If you have already filed your return for the current year, write to the IRS at the address where you filed your return and inform the agency of your new business. Include your EIN number and have a corporate officer sign the letter.

Should I have multiple LLCs?

Should I have multiple LLCs? If you run two or more separate businesses, having multiple LLCs makes sense. It can help you minimize your risk if one business fails. It can also protect your other businesses' assets if one business lands in a lawsuit or debt.

How do I file taxes if I have two businesses?

If you have two businesses, you'll need to file multiple Schedule Cs — one for each business. But, you can include all the forms and calculations with your personal income tax return under your TIN, which distinguishes your sole proprietorship.

Can you have 2 LLCs under the same address?

Same address can be used for multiple companies, although it's always a good idea to have a unique address for your business.

What is it called when you own multiple businesses?

A conglomerate is a corporation made up of several different, independent businesses. In a conglomerate, one company owns a controlling stake in smaller companies that each conduct business operations separately. Conglomerates can be created in several ways, including mergers or acquisitions.

Can 2 business use the same address?

A: If you are legitimately operating multiple, legally distinct businesses, you can typically create a Google My Business listing for each of them. It's not at all uncommon for more than one business to be located at a shared address.

Can I add another business under my 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.

How many businesses can you put under an LLC?

You can run two or more businesses under one LLC by either: running all the business activities under one LLC name, or. registering DBAs (“doing business as”), also known as Fictitious Names.

Is it better to have multiple businesses under one LLC?

While it might seem tedious or require additional effort to set up a separate LLC for your new business idea, it's often a better route to take than running both businesses under your current LLC.

What is the disadvantage of an LLC?

Disadvantages of creating an LLC States charge an initial formation fee. Many states also impose ongoing fees, such as annual report and/or franchise tax fees. Check with your Secretary of State's office. Transferable ownership. Ownership in an LLC is often harder to transfer than with a corporation.

Do I need a DBA for my LLC?

No, you do not need a DBA for an LLC. This is because when you register an LLC, you'll also register your company name eliminating the need for a DBA. However, in some instances, you may use a DBA for your LLC to expand your business and operate part of it under a name other than your original business name.

Can one person have two companies?

You can incorporate more than one subsidiary companies in which the Common Holding company shall be a Private Limited company.

Can you own 2 limited companies?

Running two limited companies usually means two sets of legal fees, accountancy fees, and other costs. Although these are unlikely to be huge, they all add up. Similarly, having two separate limited companies means that you need to maintain two sets of books & records, two sets of bank accounts, and so on.

How many businesses can a person own?

First, there's no limit to how many corporations or LLCs one person can form. Many entrepreneurs opt to file a new LLC or corporation for each of their startup ventures. For example, you can form an LLC for your landscaping business and another LLC for the golf course you purchased.

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Can an LLC start another LLC

Comment by Lynne Pfnister

hey this is attorney Elizabeth potts-weinstein and today we're going to talk about whether or not you can have multiple businesses under just one LLC an LLC or limited liability company is a business entity that you can form to protect yourself personally from liability issues of your business and there's also some other benefits about taxes and things like that now if you form an LLC there are certain costs that go into form of the LLC maintaining it paying franchise fee taxes all this kind of stuff so you may Wonder well if I have a new project a new website I have this YouTube channel I'm doing some Consulting work I'm selling a new product over here do I need to form LLCs for all these different projects the short answer is you can put all your different projects under one LLC but there are times where you don't want to so let's break that down if you put all your various projects under one LLC there are definitely benefits to doing that fewer costs because you're setting up one LLC less hassle because all the forms and all the stuff that you need to file and create you only got to do that one time all the expenses are put together so they can all share the same accounts and services and software and all that kind of stuff and there are some tax benefits to putting everything together if one of the businesses has a loss that gets wrapped into the other business that makes a profit and so it looks like you're not making as much money because the bottom line is you're not taking home any more money so it makes sense that you're paying fewer taxes however there are a couple problems with having everything in the same LLC for first you have to have the same ownership structure for those various projects perhaps this one project over here you're Consulting you're doing completely on your own over here this website business you're in a venture with a friend and so having that all in the same legal entity doesn't make a lot of sense the next aspect is that all these projects are inside the same LLC so they're all liable to each other so let's say you have one project where you're taking on a lot of debt there's a lot of inventory and it loses money it goes under and then your project over here that does awesome is making all kinds of money and is making you a profit for you to take home it's actually liable for this business so you can't just file bankruptcy and have this business go under this business has to pay off the debts of this other business and that may not be what you're looking for in certain situations so when does it make sense to have one LLC with all your projects in it first there's only one owner it's just you the project are relatively low risk so you're not taking on debt you're not likely to get sued so you're not really worried about the liability issue for the projects to each other third is that a lot of these projects are kind of new experimental ideas that you're working on and it doesn't make sense to do the expense of forming a new LLC and last you want the tax benefit of putting everything together you've talked to your tax person and that makes sense in your situation when do you not want to put them all together in one LLC first is the ownership structure is different that's just not going to work it's not going to be practical second is if one of the businesses is high risk it's taking a lot of debt it has a lot of inventory it has a lot of employees there's potential litigation issues because the kind of industry you're in you want to keep that separate from your other projects third if you want to sell off part of the business if there's one of your projects that you're developing to sell to a bigger company you're going to eventually want that to be separate you don't have to start out with it being separate but you're eventually going to want to spit it off so it can be sold as a separate project and lastly there can be tax benefits to having your various projects in different LLCs that's kind of beyond the scope of this video the exact tax benefits and it really depends upon the exact businesses you have sometimes splitting off real estate or the business that has employed a lot of employees or the business that owns all the intellectual property there can be great tax reasons to split off at even parts of a business or entire businesses from each other they can then do transactions with each other and do all kinds of creative tax things but that has to make sense in your particular situation so you want to talk to your Tax Advisor about that again this is Elizabeth Potts Weinstein if you have any questions about whether having just one LLC is a good idea in your situation feel free to ask them below and I will try to point you in the right direction thumbs up if you found this video helpful and subscribe if you'd like any more tips for small business owners thanks a lot for watching bye

Thanks for your comment Lynne Pfnister, have a nice day.
- Pete Ovitz, Staff Member

Comment by Brian

are you interested in forming an LLC for your online businesses or business today I'm going to share with you four tips to know how and when you need to form an LLC as a holding company for your online businesses let's do it hi my name is Jim part and the founding attorney here at Hawthorn law and we help small businesses and online entrepreneurs to get their legal house in order so that they can do something that truly matters in the world and today I'm here to share with you four tips that you need to know about to determine when and how you should form an LLC as a holding company for your online businesses and I have to say I'm really excited about today's video because a lot of you in Prior videos have asked me about whether or not I could use a whiteboard you're in for a treat today because I am going to be using a whiteboard as well we're gonna test this out we're gonna see if it works I think it'll work but anyway we're gonna do that today and before we go any further just remember if you haven't already go ahead hit the subscribe button click the bell thingy and and like the video if you like what I'm talking about today's question comes actually from a viewer and today it's from Myles he says could you create a video discussing how to set up a holding company I have a few side hustles that generate income I want to expand what I'm doing so I'm interested in learning how I would approach that I've read that setting up holding company to house the other businesses is a good strategy in terms of legal protection and for filing taxes I've also read it is better it's a better idea to form the holding company prior to creating the other LLC's or whatever structure if possible I'm not sure what's legit and what's nonsense could you broach that topic in a video any guidance or common practices as a starting point would be appreciated Thank You Myles for the question I appreciate it and try and answer that as best I can I'm gonna start by first discussing what a an umbrella LLC also called a holding company LLC is then we're going to talk about the main benefits of forming an LLC as a holding company for your online businesses well touch a little bit on the downsides of forming multiple LLC's and and what can happen if you do that because it's it's not all it's not for everyone I'll be honest but we're gonna talk about that and then we're gonna finish up by talking about when is the best time to form an LLC as a holding company to house all your multiple businesses are you with me on that all right let's jump over to the whiteboard I'm gonna test this out let's do it okay so when we're talking about an LLC we're really talking about here is an umbrella LLC so I know a lot of you been asking for a whiteboard so we're just going to do this is this is LL I'm gonna get used to this here this is the first time we've ever done this the whiteboard so it's kind of cool so this is gonna be a low number number one this is going to be what we call the umbrella LLC and so the box are on that and this is going to be this this LLC right here is going to own all the other LLC's so let's say you've got two other brands that you want to own so this is going to be I'll see you two and this is going to be l.l.c number three okay so this this LLC is actually going to own this LLC and it's going to own this LLC and so what you're going to do is you'll form this LLC first and then you can form these LLC's next and that's basically what an umbrella LLC is so the the member of this LLC is going to be LLC number one and the member of this LLC is going to be LLC number one and there's all sorts of other complicated strategies that can be used but this is the basic idea when we're talking about what is an umbrella LLC all right now we're going to jump into number two which is the main benefits of forming an LLC as a holding company for or your online businesses and there's really two main benefits that we're going to talk about here today and those are liability protection and tax benefits so let's start with the first one liability protection the basic idea here is and a good example of this is if you own rental real estate and a lot of people if I've had clients that owned multiple rental properties and if you own more than one rental property then generally speaking you want to form a separate LLC and also these can be called series LLC's for each of the rental properties you own and the reason for that is let's say somebody gets injured or you know maybe you went to college students and they have a party and somebody gets hurt and that happens in one of your rental properties if you've got all the rental properties in the same LLC and somebody Sue's you for what happened with one rental property then all the other rental properties can be basically attached to a judgment so they can be they're not protected from liability there but if you if you put one rental property in one LLC and another rental property in another LLC and another rental property and another LLC and if somebody Sue's one of those LLC's because they got hurt in that rental property they can't get at the other two or three or four however many rental properties you have because there's a shield of protection in place there I mean we're assuming you're not doing anything to pierce the corporate veil we've talked about that in a prior video but as long as you're not doing that then you your liability is limited to what's in that LLC and the same is true for your online business so if you've got multiple businesses that you're operating under one single holding company you know that the example I like to use is Pat Flynn because he's got a number of businesses now that he's running under the smart passive income brand you know he's got this switch pod and he's got his smart podcast player and he's got his general affiliate and revenue that he makes so he and I don't know what his legal structure is because I'm not affiliated with him at all chances are I suspect he probably has a lawyer and and he probably has different LLC's maybe maybe not Pat if you're watching this you want to reach out I'm happy to help the idea being that you would have a different LLC for each of those unique businesses because if something were to happen with the switch pod player I don't maybe knock yourself over to heaven with your switch Bob player it's not a switch pop players the switch pot switch pot he's got the smart podcast player not to get those confused anyway if you were to like knock yourself over the head with the switch pod or maybe they it swings around and you Jam your knuckles or something I don't I don't know how you can get injured using that but if you did get injured using that then then nobody you can't sue him with the smart podcast player if that makes sense and so if you've got a business if you've got and so if you've got an online business and you have you know you've got you're making some affiliate revenue here and perhaps you've got some courses here and maybe you've got some other digital products here that you're selling or maybe you've got you know an e-commerce business over here

Thanks Brian your participation is very much appreciated
- Pete Ovitz

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