Can More Than One Business Be Conducted Under One LLC?

By Stephanie Kurose, J.D.

Can More Than One Business Be Conducted Under One LLC?

By Stephanie Kurose, J.D.

While multiple companies can operate under one limited liability company (LLC), there are alternatives ways to structure multiple businesses, and each has its own specific advantages and disadvantages. For serious entrepreneurs who have started their own companies, this becomes a common question. Learning more about your options and what suits you best will help you determine how to structure the use of multiple companies under one umbrella.

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LLC Basics

An LLC combines the characteristics of a corporation and a partnership. It provides its owners, called members, with the management and maintenance flexibility of a partnership while also providing limited liability protection similar to a corporation. For example, like a partnership, it does not have a board of directors or shareholders and is not required to pay corporate income tax. But, similar to a corporation, LLC members are also shielded from being held personally liable for the actions of the business, except in very narrow circumstances. These entities are treated separate and distinct from its members.

Operating Multiple Businesses Under One LLC

If you want to operate multiple businesses under one LLC, there are a couple of different ways to do so. One way is to create a "doing business as" (DBA) name, which allows you to operate an additional entity under a name other than its legal name. A DBA is essentially a fictitious name that you can register while still operating each one under the main company.

Similarly, you can have your primary company own multiple subsidiaries. A subsidiary is owned by another company that owns a majority of its shares or the actual entity itself. While these companies are considered separate from the main one, the LLC still controls them.

One of the benefits of doing this is that it requires less paperwork when you form a new company. It also helps you avoid the fees associated with forming a new one.

However, there are some downsides as well, especially with multiple DBAs. If something happens to one of your business ventures, it can impact the others. For example, if one company is involved in a lawsuit, creditors could pursue the assets of all others you own that operate under the same umbrella.

Alternative Business Structures

Alternatively, many people opt to create new LLCs for each different business. While this creates more paperwork and increases the amount of money you spend on filing fees, it is a simple and straightforward way to operate multiple companies that may share no connection with each other. It also shields each entity from the liabilities of others you might own. Another option is to create a holding company, which owns other LLCs or corporations. In this case, it can all others.

If you own multiple companies or are considering starting an additional business and would like more guidance on this subject, you can find additional information on your respective state's Secretary of State website. Ensure that you are aware of and abide by your state's laws when it comes to owning multiple LLCs.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.