Do you need multiple LLCs for multiple businesses ppp [Detailed Response]



Last updated : Aug 14, 2022
Written by : Modesto Serfoss
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Do you need multiple LLCs for multiple businesses ppp

Can you get PPP for multiple businesses?

Yes, each business may be eligible for a loan through the PPP if it meets all the requirements.

Do multi member LLC qualify for PPP?

If you are an LLC with multiple members, you'll be applying for the PPP as a partnership (unless you've filed Form 2553 to the IRS, in which case you'll be filing as an S corp). Previously, partnerships were only eligible to apply for a PPP loan to cover payroll expenses.

Do You Need LLC for PPP loan?

Yes, Even if You Have Not Formed an LLC, You Still Qualify However, if you filed a Form 1040 Schedule C on your 2019 tax return, you likely qualify to receive a PPP loan.

Can you get SBA loan for multiple businesses?

Yes, as long as each of your loans fits within the SBA's lending guidelines, there is nothing preventing you from having more than one SBA loan. This applies to both SBA 7(a) loans and SBA 504 loans.

How many times can you apply for PPP?

The $10 million (or $2 million for a Second Draw PPP Loan) maximum loan amount limitation applies to each eligible business entity, because individual business entities cannot apply for more than one First Draw or Second Draw PPP Loan.

Can you get two PPP loans in the same round?

Loan details PPP now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP loan with the same general loan terms as their First Draw PPP loan. Second Draw PPP loans can be used to help fund payroll costs, including benefits.

What do you need for a PPP loan self employed?

  1. 1040 Schedule C for 2019.
  2. Your birth date.
  3. A color copy of your Driver's License (front and back)
  4. 1099-MISC, if you have them.
  5. A voided check for your business bank account.

Is PPP taxable income sole proprietor?

Since a sole proprietor doesn't run payroll for the owner, the PPP loan proceeds were never taxable income nor is paying yourself ever a deductible expense.

What were the requirements for the PPP loan?

  • A small business or nonprofit organization with 500 or fewer employees.
  • A small business, 501(c)(19) veteran organization, tribal business, or small agricultural cooperative that meets the SBA's size standards.

Can I get a PPP loan if I just started my business?

Prior to the March 3, 2021 change, if you were self-employed and did not have employees, your business must have showed a net profit on either your 2019 or 2020 Schedule C to qualify for PPP. Now your business must show gross income or a net profit to qualify.

How long do you have to have a business to get a PPP loan?

Businesses can apply for a PPP loan as long as they were operational on February 15, 2020, and had paid employees at that time (even if the owner is the only employee). The SBA's 500-employee threshold includes all types of employees: full-time, part-time and any other status.

Can self-employed with no employees get PPP loan?

Self-Employed With No Employees? You Can Still Get a PPP Loan.

What is the easiest loan to get approved for?

The easiest loans to get approved for would probably be payday loans, car title loans, pawnshop loans, and personal installment loans. These are all short-term cash solutions for bad credit borrowers in need.

How many small business loans can you apply for?

How Many SBA Loans Can You Take Out? In theory, there's no limit on how many SBA loans a borrower can take out, as long as they remain within the SBA guidelines. In some cases, rapidly-growing companies have taken out up to 9 SBA 504 loans within a 15-year period.

What disqualifies you from getting an SBA loan?

Ineligible businesses include those engaged in illegal activities, loan packaging, speculation, multi-sales distribution, gambling, investment or lending, or where the owner is on parole.

What happens if you don't pay back PPP?

That does not mean defaulting on a PPP or EIDL loan of $25,000 or less is consequence-free. Defaulting on your PPP loan will likely prompt the federal government to report your business to credit scoring companies, meaning your personal and business credit is likely to take a substantial hit.

Can Self Employed use PPP loan to pay themselves?

You can use the PPP funds to pay yourself through what's called owner compensation share or proprietor costs. This is to compensate you for a loss of business income. To take the full amount of owner compensation share, you will have to use a covered period of at least 11 weeks weeks.

Is PPP still available 2022?

Notice: The Paycheck Protection Program (PPP) ended on May 31, 2021. Existing borrowers may be eligible for PPP loan forgiveness. SBA also offers additional COVID-19 relief.

What are the rules for PPP Round 2?

Second Draw PPP Loan forgiveness terms Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan, The loan proceeds are spent on payroll costs and other eligible expenses, and. At least 60% of the proceeds are spent on payroll costs.

What if I miss the PPP forgiveness deadline?

What Is the Deadline for PPP Loan Forgiveness? If you meet all of those requirements, then you have ten months from the end of your loan's covered period to apply. If you miss the ten-month deadline, then you're responsible for the interest and payments.


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Do you need multiple LLCs for multiple businesses ppp


Comment by Daphine Maniscalco

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 Daphine Maniscalco, have a nice day.
- Modesto Serfoss, Staff Member


Comment by Monserrate

listen i didn't already told you that you don't need an llc to start your business now y'all want to turn around and talk about forming multiple llc's man y'all doing way too much and don't worry imma show you why right after this what up family it's your favorite uncle cousin tyrone gregory the self-employed tax guy and i am here today to do my best to show you why forming multiple llc's may not be the best idea especially if you're just starting your business yes llc's do have their place in the business world or they wouldn't exist right but there seems to be this mystical aura surrounding them because everybody's treating them like they're unicorns or something and you know me i've already told you that you don't need an llc to start a business and if you haven't watched that video i'm gonna put the card right there and on the screen so you can tap on that and watch it after this of course right but llcs aren't necessary to achieve the goals for most and again yes llcs do have their place in the world or they wouldn't exist right there wouldn't be laws around them that they wouldn't be states that have them they wouldn't be anything they do have their place however especially if you're just starting a business the multiple llc thing may not be the route you want to go so let me kind of explain to you why okay so let me explain how this video came to be the other day i'm here at work and i decided to take a break and pull up my phone and you know get on tick tock just to take a break which i don't recommend because once you do that you you go down the rabbit hole right find something else to do while you're on your break but anyway so while i'm scrolling through tick tock i happen to stumble across this video this is how the rich set up holding companies it's okay so check this out what happens is instead of having an llc pay them directly where they pay full taxes they'll set up an llc and then another llc taxed as an s corp so when the money comes into this llc either in management fees or consulting fees they're able to split it into two pieces distributions and a salary and what that does is it saves them self-employment tax remember tax avoidance is not tax evasion keep educating be good to future you now don't get me wrong i'm not hating not at all as a matter of fact i think he did an excellent job explaining the benefits of such a structure in about i think the video was like 30 seconds again not hayden i think he did an excellent job and explaining it however like he said in the video that type of setup is for the wealthy key word there wealthy the rich people with money this is how the rich set up holding companies so unless you just so happen to have a gang of money laying around or a bunch of money that you can just throw at a business then that structure may not be the best for you all right so what's the point of such a structure so to explain this what i've done and i have to give credit to my wife my handwriting isn't this neat i recreated the whiteboard drawing that he had on his video so we can kind of go through and and break down the point or at least from what he explained in the video why this structure exists right so no we still got money here on the board we're just gonna throw them anyway all right so what is we saw in the video we have three and one llc is being taxed as an escort which is uh going to be say the the holding company and as explained in the video the goal is to save money on your self-employment taxes through your business operations because as a sole proprietor that is the biggest tax property that you'll pay is the self-employment tax so to reduce that here is a strategy that's being incorporated by the wealthy you'll have an llc set up to bring in income another llc set up to bring income but because llc's by themselves are passed through all of the income coming into these llc's are simply going into one llc which is then being taxed as an s corp and from the s corp you as the owner are now getting paid through your w-2 salary or distributions but because we're paying some of your salary via w-2 and remain on the distribution it eliminates some of the cost for the self-employment tax right because you're only going to pay uh social security and medicare which is the self-employment tax you're only going to pay that on the w-2 salary you don't pay it on the distribution however and here is why your favorite uncle cousin is trying to tell you that if you're just starting your business this may not be the route you want to go i get it as young entrepreneurs you have multiple ideas all these things are in your head keeping you up at night and you want to be like i want to put all of my ideas out there once so i want to form these multiple llcs so i can have everything operating and get going may be great idea maybe not and here's what i want to show you why because when you do this first of all note that when you're just starting out as a new entrepreneur you have very limited resources right that's why a lot of entrepreneurs they seek additional capital through investors through venture capitalists to angel capitals they seek it capital because on your own your resources are limited so your goal as a starting entrepreneur is to not frivolously waste those resources and this type of startup especially when you're just beginning is not going to be uh wise and here's why because one thing well there's three things you have to consider for each struggle structure there is the operations cost right so uh opr put here for operation is the admin cost for that and you can see the difference between my handwriting and my wife's and then there is the taxes cost and this happens on each ones right you have operations here uh admin cost and then you also have taxes cost here and guess what you also have it here you have operations here you have admin here right and you have taxes here and the taxes is not necessarily an income tax right because that's what we're trying to avoid reducing taxes but in some llcs has to pay what's called a franchise tax fee and that's for simply being labeled an llc you have to be able to pay that tax so if you're paying this right somebody has to operate this particular entity on its own somebody has to operate this particular entity on this one then this one here especially being taxed as an s corp somebody has to operate that and that's the same for the administration somebody has to administer this llc somebody has to administer this llc somebody has to administer this one here is this being taxed as an s corp and if it's just you is it possible absolutely but you think about operating and administrating three different entities that's going to be a challenge again time is another one of your resources that you really don't have much of once you become an entrepreneur people have this misconception that hey i'm gonna leave my nine to five and i'm gonna have a four hour work week no not gonna happen right once you become an entrepreneur that in the beginning i'm gonna say in the beginning because it's possible to get to that four-hour work week but in the beginning g


Thanks Monserrate your participation is very much appreciated
- Modesto Serfoss


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