How to Have Multiple Businesses Under One LLC? (Explained)
One LLC can operate more than one business line, but the structure does not automatically create separate liability shields for each activity. Choose between one LLC with separate brands, a DBA arrangement, a series LLC where recognized, or separate LLCs based on state law, risk, ownership, financing, and administrative cost.
Quick Summary
- To operate multiple businesses under one LLC, utilize strategies like DBAs (Doing Business As), creating a Series LLC, or setting up a parent LLC.
- Implementing these structures can streamline operations and consolidate tax filings.
- Approximately 83% of small business owners initiate their ventures using personal assets, with an average start-up cost of around $40,000, reinforcing the practicality of managing multiple ventures under a singular LLC framework to streamline financial oversight.
- Based on professional experience, consolidating businesses under a single LLC can significantly streamline management and enhance asset protection, although careful planning and legal advice are recommended to navigate the complexities involved.
Three Structures for Multiple Business Lines
Start by deciding whether the activities have different owners, risk profiles, lenders, assets, or exit plans. If they do, a single LLC may be easy to run but may not match the separation you want.
- One LLC and DBAs. Use the existing LLC and register each assumed name where required. A DBA is a name registration, not a new entity.
- Series LLC. Confirm that the formation state recognizes series and check how other states treat the structure.
- Separate subsidiaries. Form separate entities when distinct ownership, contracts, financing, or liability separation justifies the added administration.
"This setup is ideal for individuals seeking to grow their enterprise into a secondary brand while maintaining a single corporate structure. Remember, registering your 'Doing Business As' (DBA) does not inherently grant extra legal protections."
-Jon Morgan, Co-Founder & Chief Editor of Venture Smarter
Pros and Cons
- This structure is versatile and cost-effective, eliminating the need for filing multiple LLCs, thus saving on associated costs.
- The main drawback here is that there is no limited liability separation. All entities under the parent LLC share liability.
- You have to file taxes using the same LLC for each business under its separate name. This can be cumbersome, especially if you have a lot of different businesses.
- The names also have to match up with your bank accounts and other financial records, which means it could be difficult to keep track of your finances.
Series LLCs Require State-Specific Research
A series LLC is not a universal substitute for separate LLCs. Before using one, confirm that the governing statute permits the series, that the operating agreement and records maintain the required separateness, and that every state where the business operates will recognize the intended effect. See our Series LLC guide for the structure, but confirm current state rules before filing.
Pros and Cons
- Each business operates as an independent entity, allowing for easy tracking of profits generated by each activity.
- The entities are separate and has individual protection.
- Managing multiple entities requires additional effort and resources, including administrative tasks and filing fees.
- Separate LLCs may increase tax burdens due to misaligned fiscal years and inconsistent accounting practices.
Separate LLCs Under a Holding Company
A holding-company structure can separate ownership of operating companies from the activities they conduct, but each entity needs its own records, contracts, accounts, tax treatment, and compliance calendar. A holding company does not erase liability created by guarantees, commingling, or the owner’s own conduct.
Pros and Cons
- This structure allows you to keep all of your businesses under one holding company while still making it easy to file taxes.
- It is also an effective way to keep track of the profits and losses from each business since you only report them under a single holding company.
- This structure, while cheaper than multiple LLCs, incurs higher initial costs due to separate LLC setup for subsidiary companies to isolate finances.
Why Should I Have More Than One Business Under One LLC?
Use one LLC when the activities have the same owners and similar risk and the administrative simplicity is valuable. Consider separation when one line owns valuable property, has materially different risk, needs a different investor group, or may be sold independently.
Before filing, compare the state’s annual reports, registered-agent requirements, tax registrations, insurance, bank accounts, contracts, and bookkeeping for each option.
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Checks Before Choosing the Structure
- Ownership and approvals: confirm who owns each line and who must approve a new entity or DBA.
- Debt and contracts: check lender consent, guarantees, leases, and assignment restrictions.
- Assets and permits: confirm which entity will own property and hold each license.
- Existing obligations: do not move contracts or assets until tax, insurance, and counterparty requirements are reviewed.
FAQs
Can one LLC own two businesses?
Yes, one LLC can conduct multiple lines of business, but the same entity generally bears the liabilities of both unless a valid separate structure applies.
Does a DBA create a separate liability shield?
No. A DBA is a name used by an existing entity; it does not create a new LLC.
Are series LLCs recognized everywhere?
No. Confirm recognition and filing requirements in each state where the business will operate.
References:
- https://www.sba.gov/counseling/launch-your-business/
- https://www.census.gov/econ/bfs/
Has anyone faced challenges with state regulations when registering multiple DBAs under one LLC? I’m curious if the process is straightforward or if there are hidden fees.
I run multiple side hustles under a single LLC using DBAs, and while it’s cost-effective, managing finances separately for each business has been a challenge. This guide’s breakdown of really resonates.