Can I Add Another Business Under My LLC?

While you can certainly add a new business to an LLC, it is not as simple as it can initially suggest. It is permissible and possible to operate multiple businesses under the umbrella of one LLC. Many business owners opt for a DBA (doing business as) for their new business in the LLC.

But how can a business be added to an LLC, and how will it work out for the LLC? This guide looks to answer this question while covering other aspects of this topic down below:

How To Add A Business To An Existing LLC?

How To Add A Business To An Existing LLC?

 

If your question revolves around legally structuring multiple businesses, there are many ways to do it. Most entrepreneurs that we know are always highly curious, driven, and never content with business structures’ status quo. 

Dabbling in multiple ventures can result from such traits of entrepreneurs, and it is highly justified. A personal trainer may opt to launch a fitness apparel line, and a restaurateur may want to open a wine shop. With so many opportunities that are always there at the helm, structuring your business legally and technically in a smooth way can be a big ask.

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Apart from adding a business to an existing LLC, there are two other ways that you can structure your business multiple businesses. You can form a corporation for each trade or create a business under the umbrella of a holding company.

Before I explain the process of adding a business into an existing LLC, first, let us discuss the other types to structure your multiple companies.

David Jonhson

CEO

Creating Individual LLCs/Corporations For Each Business

It is the simplest and proper way of structuring multiple businesses. There is no limit to how many LLCs a person can form, so that should not be a problem. Many entrepreneurs opt for a new LLC for each business, and it offers various advantages. For example, you can form a property LLC for real estate that you have just purchased and another LLC for your wine business.

As we have discussed earlier, each way of structuring multiple businesses comes with its advantages and disadvantages. One of the brighter sides of creating individual LLCs for each business is that both businesses become independent of each other, and the risk is isolated. If your one corporation is issued, the other one remains protected.

On the downside, creating individual LLCs and corporations for every business comes with extra maintenance and legal fees. For many entrepreneurs who want it all simple, this is pure pain, and they don’t like it, while others can prefer the isolated risk over fees, and happily go for this option.

Creating A Business Under A Holding Company

Yes, you can create multiple LLCs for various businesses and then form a holding company that holds all those LLCs. It is another innovative approach that many entrepreneurs prefer due to the flexibility that it offers. This scenario is prevalent in some situations, for example, where a business is established and looking for a new business, and where a company is looking to be acquired or trying to spin off one for their businesses.

As the situations might have suggested, it is highly technical and involves complex legal procedures. It is always a best practice to consult tax consultants and business advisers before opting for this option.Now that we have discussed the other two options let’s move to the main subject – adding a business in an existing LLC. As mentioned at the start of the article, it is done by obtaining a DBA (doing business as) for each business under one LLC. You can add a company under an LLC but then run it via its DBA.

Adding A Business Into An LLC Via DBA

So, you may have an existing LLC for “Syed’s legal services,” and you want to start landscaping, your LLC can file a relevant DBA for “Syed’s landscaping services.” From a marketing perspective of the business, you can operate each venture as if they are independent companies. You can use each business name, collect cheques written to each business name, etc.

What makes this approach more exciting and an easy-to-opt is that each business venture can use the company name and right branding, and it also simplifies a lot of annual maintenances. All you need to do is pay your annual LLC’s fees for your corporation without paying individually for each DBA.

Similarly, all your DBAs will need only one EIN. On top of that, when filing your taxes, you can collect all the incomes from each DBA and file the tax under one LLC.

Each DBA enjoys the legal protection of the parent LLC. For example, if one DBA is issued, the assets of the LLC will still be protected. However, it is essential to understand that one DBA isn’t protected from the other DBA under one LLC. So, if one DBA is issued, the other DBAs under the same LLC are vulnerable as well.

From these different methods of managing multiple businesses, we can conclude that each comes with its pros and cons. It is all down to the nature of your business which approaches you to take towards managing multiple businesses, but an expert advice should always be sought.

General FAQ

Frequently Asked Questions

Here are answers to some of the frequently asked questions

While you may not always be legally asked to, you should always add LLC to your business name. All invoices, legal records, tax returns, contracts, leases, letterheads should include LLC at the end of your business name. In some states, it is also a legal requirement to do so.

It should be understood that adding LLC at the end of your business is more beneficial for your business than for anyone else. When you have an “LLC” noted on your business documents, it will inform your clients and other customers that your company has a separate legal existence and that they’re legally dealing with a corporation and not with an individual.

It helps save your business from many potential lawsuits because people considering to sue you may stand down by realizing that they won’t have access to your assets.

Multiple business entities may be operated through the same address, as long as they are incorporated as a separate entity with the Secretary of state’s office.

Yes, you can use your LLC to own and operate other businesses. This will offer you the advantage of separating your different business activities from taxation, and a disadvantage of managing two businesses – bookkeeping, etc.