Can an LLC Own Another LLC?
Owning an LLC is a great way to expand your business, making it easy to separate personal and professional finances. But other ways to grow your business don’t involve setting up multiple companies.
You can also own LLC with multiple DBAs (Doing Business As), multiple DBA pros and cons, set up a series LLC, or even hold multiple LLPs under one owner or LLC.
Different Ways to Expand Your Business
Depending on your company’s size and scope, you may be able to grow by owning one LLC and operating multiple DBAs. This is a more straightforward approach that involves fewer legal commitments.
But if you’re looking for more growth potential, consider starting multiple LLCs under one parent company.
There are several advantages when it comes time to sell these businesses. Prospective buyers can individually value them without affecting their values as part of an entire portfolio or series.
Owning One LLC with Multiple DBAs
You can also have multiple DBAs to use the same LLC for numerous businesses. This is an excellent way to expand your business without having to create a new entity each time.
You might have one DBA for your main business and another DBA for a side project, or perhaps you have one DBA for personal use and another for professional purposes.
Multiple DBA pros
The primary advantage is how much simpler it is to form than a Coorporation. When you include an LLC, your fees are lower, and the process isn’t as complicated.
You also get consolidated taxation, which means you don’t have to file multiple tax returns yearly like a corporation. If you own a company, these may be helpful to websites or businesses under one umbrella organization.
Multiple DBA cons
The first reason is that there is no separation of limited liability. You will likely have to pay additional fees for each DBA every time your LLC changes hands.
This may make it more challenging to sell your business because buyers may be concerned about all the extra costs and paperwork involved with owning multiple DBAs.
Finally, if you own one DBA but want another, consider creating two separate LLCs instead of having one LLC hold another LLC.
Multiple LLCs Under One Owner or LLC
This is a common question. You can own multiple LLCs and even use one company to hold another.
You can have one person own more than one LLC by having them be the owner of each company. This would be considered the same person because they are all under the same entity.
Multiple LLC pros
Numerous factors could motivate you to have multiple LLCs:
- Separating liabilities.
- LLC tax benefits
- Capital raising potentials
Multiple LLC cons
- The cost of setting up a series LLC is higher than for a single-member LLC.
- You’ll have to manage complex accounting and taxes for each member of the series LLC, which may be complicated.
- You’ll need to submit different tax returns for each member of your series LLC.
Setting up a Series LLC
A Series LLC is like the owner of multiple properties leased to tenants. Each property (each series) can be owned separately by different people or entities.
Can LLC own S corp
A series LLC is an LLC that consists of multiple entities, each of which has its assets and liabilities. In other words, a series LLC is one company with multiple divisions.
The main advantage of creating a series LLC is that it allows you to run multiple businesses under one legal structure while maintaining limited liability protection on all fronts.
It also makes transferring ownership or merging with another business easier because everything can be done through the same document instead of filing separate deeds for each company in question.
Series LLC cons
A Series LLC is a relatively new, complex, and advanced structure to maintain. The owners of the Series LLC must be disclosed in the public records.
This means that if anyone wanted to check who owned either of these entities, they could search for them online through public records.
Conclusion
You can own an LLC that owns another LLC. However, there are some considerations.
Also, consider whether or not both LLCs will operate simultaneously (like a real estate investment company buying and selling properties).