Business clients frequently ask if they can structure multiple businesses under one limited liability company ( LLC) and whether it’s a good idea. Generally, the answer is yes, and it depends.
How you should structure multiple businesses and whether it’s a good idea depends on your business goals. The advantages of having multiple companies under one LLC include increased brand flexibility, simplified management, cost savings, and tax efficiency.
On the other hand, multiple businesses under one LLC can give rise to liability risks, brand confusion, and investor concerns.
Are you a young entrepreneur looking to launch your next venture as a different brand? Are you in the real estate rental business and seeking to minimize your liability exposure?
Perhaps you own a law firm and want to open a café down the street? In general, business owners looking to operate multiple businesses at once in Florida have three options for structuring their affairs. Let’s walk through the pros and cons for each.
According to Business Attorney Trevor Brewer, “The decision whether to combine business lines under a single company or maintain separate companies for each of them largely comes down to two factors: (1) the similarity of the business lines, in terms of opportunity and risk, and (2) the increased costs and risks associated with managing multiple companies.”
Keep reading to learn more about the pros and cons of each. Then, contact us to schedule your consultation and explore how we can help your business grow and thrive. Our experienced BrewerLong business law attorneys have proudly supported Florida entrepreneurs for over a decade.
Whether you’re establishing a new business, managing multiple ventures under one LLC, or restructuring existing operations, we’re here to provide strategic legal guidance at every step.
Can you have Multiple Businesses Under One LLC?
Many business owners wonder, “Can you have multiple companies under one LLC?”
The answer is yes. You can operate multiple businesses under one LLC. However, if liability concerns or difficulties managing diverse activities under one LLC are issues, you might explore other structural options.
A series LLC, available in some states, allows for separate “series” within a single LLC, with each series operating independently and protected from liabilities arising from other series. Alternatively, doing business as (DBA) names allows you to manage multiple companies under one LLC while still branding them separately in the marketplace.
Choosing the proper structure for your business requires a nuanced approach considering operational efficiency, liability risks, and long-term business objectives. There is no one-size-fits-all solution, and what works for one entrepreneur may not be ideal for another.
What Is a DBA?
Many business owners use a “Doing Business As” (DBA) or Fictitious Name to manage additional businesses with different names under the same LLC. In Florida, a DBA is also referred to as a fictitious name. It is common for a business to advertise and operate under different names from its legal one.
A DBA allows you to operate multiple businesses under a name different from your own (in the case of a sole proprietorship) or the registered name of your business.
For example, if you operate a retail business called “Brick-and-Mortar Retail Clothing, LLC” and subsequently decide to expand the business online, A DBA will allow you to use a more marketable name such as “RetailClothing.com.”
In Florida, setting up a DBA is relatively straightforward. Here’s a general outline of the process:
- Name search. Check the Florida Division of Corporations website to ensure the desired DBA name is available and not already in use by another business.
- Register the DBA. File a name registration with the Florida Division of Corporations by mail or online. The registration form requires information such as the DBA name, the legal name of the business, the business address, and the type of business entity.
- Publication requirement. Some counties in Florida require you to publish a notice of your intent to use a fictitious name in a local newspaper. Check with the county clerk’s office where your business is located to see if this requirement applies.
- Renewal. Fictitious name registrations in Florida expire after five years and must be renewed to remain valid. However, there are no restrictions on the number of names you can file if you have multiple name ideas.
- Business license. Depending on your business type and location, you may need to obtain additional licenses or permits to operate legally in Florida. Check with your local county or city government for specific requirements.
If you have any questions or issues with setting up a DBA for your business, contact us at BrewerLong to talk to one of our experienced business law attorneys.
Can I Have Multiple DBA Under One LLC?
Business clients frequently ask whether they can have multiple DBAs under one LLC. In Florida, owners of an LLC can apply for an unlimited number of DBAs.
A business can use a DBA to advertise and transact business. Florida law requires you to register your DBA names so that the public is aware of who is operating the business.
LLC owners must pay to register each separate DBA they wish to use. Note that a DBA can be registered at any time. You can apply for a DBA when you first register your new business. Or you can apply for a DBA later if you decide to make changes to your business later down the road.
Can I Use the DBA to Sign Contracts?
This is generally not a good idea. When signing contracts or other legal documents, it is important to use your registered LLC name, not a DBA. Customers should know that they are dealing with a limited liability company. Service contracts, contractors, suppliers, and vendors should all have an LLC denotation. However, this doesn’t mean you must include “LLC” in every communication.
For example, you might not want to include “LLC” on logos or website marketing materials (However, you might disclose in the website’s terms and conditions).
What Are the Benefits of Running a Business with DBAs?
This is an excellent arrangement for those looking to expand their business into a second brand but stay under one entity. After registering your DBA, you don’t receive any additional legal rights or protections per se. However, proper registration with the Florida Secretary of State gives notice to anyone seeking to do business under the same DBA.
An additional advantage of using DBAs is that it keeps administrative costs down. You don’t have to keep separate bank accounts, accounting, or operating agreements for each business.
What Are the Drawbacks of Running a Business with DBAs?
A DBA by itself does not create a separate business or legal entity. It is all part of the one LLC. This means that they all share liability if you operate multiple lines of business under a single LLC. In other words, if one brand gets sued, it’s the LLC getting sued, not just that one DBA. A DBA will not separate and shield the LLC from the debts and obligations of the other lines of business.
How Many LLCs Can You Have In Florida?
You can own unlimited LLCs, but each requires payment for formation and maintenance. Entrepreneurs often establish multiple LLCs to expand their brands, benefiting from liability protection and tax incentives for new businesses.
What Is a Series LLC, and Can I Form One in Florida?
A series LLC is a unique form of limited liability company where the company is divided into separate series, each with its own assets, liabilities, and members. Each series operates like a separate entity, providing liability protection for the assets in that series.
However, it’s important to note that while Florida permits foreign series LLCs to register and operate in the state, it does not currently allow the formation of series LLCs under Florida law.
To register a foreign series LLC in Florida, the LLC must file an Application for a Certificate of Authority with the Florida Division of Corporations. This application typically requires the LLC’s name, jurisdiction of formation, principal office address, and the name and address of a registered agent in Florida.
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Set Up a Holding Company: Multiple LLCs Under One LLC
Can you use your LLC for multiple businesses? Yes. Another way to structure multiple businesses under one LLC is to set up a holding company. Under this option, you would create separate LLCs for each new business venture and “hold” them under your primary LLC. Essentially, it’s like having multiple LLCs under one LLC. This arrangement is also referred to as an umbrella company or parent company.
Typically, the role of the primary LLC is to simply own the new businesses, while management takes place at the subsidiary level.
What Are the Benefits of Organizing My Multiple Businesses Under a Holding Company?
A holding company has two primary benefits: These are liability protection and tax benefits. With respect to the former, one example may be the owning and renting of real estate to college students.
Generally, if the owner owned more than one rental property, they would form separate LLCs for each of the rental properties.
This protects the parent company and each rental property from the liabilities of the other. For example, if the college kids had a party and someone got hurt and successfully sued the owner, the parent business and all the other subsidiary properties would be protected from collections.
As long as you abide by your state’s LLC laws, your liability is limited to what’s in that LLC.
A nice thing about an LLC is that you don’t have to file a separate tax return for each subsidiary LLC. This is because the income earned from each subsidiary flows to the parent company. The pros of putting multiple businesses in one LLC include the following.
Limited Liability Protection
Each LLC provides a separate legal entity, shielding individual owners from personal liability for the debts and obligations of the other LLCs within the business. The assets of the other LLCs and the owner’s personal assets are generally protected from being used to satisfy the debts of that particular LLC when one LLC faces a lawsuit or financial difficulties.
Asset Protection
Multiple LLCs can offer additional layers of protection for business assets. If one LLC faces legal issues or bankruptcy, the assets of other LLCs may be safeguarded.
Flexibility in Business Structure
Operating multiple LLCs allows for a flexible and scalable business structure. Each LLC can be tailored to specific business activities or investments, offering greater control and management efficiency.
Tax Benefits
Multiple LLCs can provide tax advantages, such as choosing different tax classifications for each LLC (e.g., partnership, S corporation, or disregarded entity), potentially reducing overall tax liability. Additionally, certain expenses or losses from one LLC may offset income from another, leading to tax savings.
What Are the Drawbacks for Organizing My Multiple Businesses Under a Holding Company?
A holding company can be expensive to manage. It can also cost you a lot of money to keep up multiple LLCs. Note, that for Florida LCCs, the initial filing fee for Florida LLCs is approximately $100 with annual report filings at $138.75 per year.
In addition, owners typically hire registered agents for each separate LLC. A registered agent is one who receives service of process on behalf of your LLC. In Florida, a registered agent will run approximately $100-$300 per business per year.
Finally, an umbrella company is going to generate a lot of paperwork. The more LLCs you have, the more complicated your structure is going to be.
Here are some of the biggest drawbacks a business owner might see while operating multiple businesses under the same umbrella.
Increased Administrative Burden
Managing multiple LLCs requires additional administrative tasks, such as maintaining separate bank accounts, filing separate tax returns, and complying with state-specific regulations for each LLC. This can be time-consuming and complex.
Higher Costs
Setting up and maintaining multiple LLCs can be more expensive than managing a single LLC due to the need for multiple filings, legal fees, and administrative costs. Additionally, each LLC may incur separate operating expenses.
Complexity in Accounting and Reporting
Each LLC must maintain separate accounting records, which can be challenging to manage. Reporting requirements, such as filing annual reports and tax returns for each LLC, can add to the complexity.
Potential for Confusion or Mismanagement
Multiple LLCs increase the risk of confusion or mismanagement, especially if proper accounting and legal structures are not in place. This can lead to issues such as the commingling of funds or assets, which may jeopardize the limited liability protection of the LLCs.
Overall, while there are benefits to having multiple LLCs, such as increased protection and flexibility, business owners should carefully weigh these against the potential drawbacks and consider consulting with legal and financial professionals before proceeding.
Create Independent LLCs for Each Business
Many business owners choose to form a new LLC for each of their business ventures. In Florida, there are no restrictions on how many LLCs a businessperson may create.
What Are the Benefits of Creating Independent LLCs for each Business?
Like creating a holding company, this option protects each LLC from the liabilities of your other LLCs. For example, a practicing doctor may decide to form an independent LLC for their new café venture.
In the event the doctor becomes personally liable to a patient for medical malpractice, that patient can’t go after the assets of the café business. That business is shielded from collections.
What Are the Drawbacks of Creating Independent LLCs for Each Business?
What’s the downside of this approach? Like the holding company option, creating multiple LLCs comes with substantial compliance fees and paperwork.
This includes registering articles of organization for each company, maintaining separate operating agreements, filing annual reports, and paying applicable fees for each LLC.
Furthermore, each LLC must obtain a separate employee identification number and its own business licenses and permits. Finally, each LLC must maintain its own records and bank accounts.
What Is the Difference Between Operating Independent LLCs Versus a Holding Company?
If you decide to go the independent LLC route, each LLC operates as a separate legal entity, owning its assets and liabilities. This structure provides liability protection for each business activity, meaning that if one LLC faces legal issues or financial difficulties, the assets of the other LLCs are generally protected. On the other hand, holding companies can offer benefits such as centralized management, tax advantages, and asset protection.
While operating multiple LLCs share many similarities with the holding company approach, the two options differ materially in one area: tax consequences. When multiple LLCs are organized under a single holding company, it may be possible to file a single consolidated tax return.
This can result in a lower tax liability. In comparison, you must typically file separate tax returns for each LLC if you choose to operate independent businesses.
How Can a Business Law Attorney Help?
Although you aren’t required to hire a business law attorney before starting a venture, the right one can provide invaluable guidance. A business lawyer at BrewerLong can be essential in helping entrepreneurs understand the complexities of setting up multiple businesses under one LLC, business formations, and asset protection. They provide valuable insights into the potential risks associated with different business structures, including the hidden liabilities that might arise when operating multiple ventures under one LLC. A knowledgeable attorney can assess your goals and tailor recommendations that align with your vision while minimizing exposure to unnecessary risks.
Moreover, working with our experienced business law attorneys ensures you stay compliant with state regulations, tax obligations, and contractual agreements. They can draft or review important documents—like operating agreements and contracts—ensuring that your businesses’ legal foundations are solid and transparent. This is particularly important when multiple companies operate under one LLC, where a well-drafted operating agreement can prevent misunderstandings and disputes between partners or investors.
We can also assist with naming each LLC, drafting operating agreements tailored to each entity’s needs, and filing the required paperwork with the state. We offer advice on tax implications and strategies for minimizing liability risks.
If you plan to attract outside funding, a business lawyer can also help you navigate potential investors’ expectations. Structuring multiple ventures under one LLC might raise concerns about liability exposure or financial transparency, and an attorney can help you address these concerns by recommending alternative structures—such as forming separate LLCs, using DBAs, or exploring Series LLCs. With expert guidance, you can build credibility and inspire confidence among investors and partners.
Additionally, working with a trusted business offers more than just legal expertise; it also provides peace of mind. An attorney can intervene swiftly to protect your interests when challenges arise, whether a contract dispute, compliance issue, or unforeseen liability.
Ultimately, the right business law attorney can help prevent costly mistakes, ensure that the LLCs are set up correctly, and provide ongoing support to ensure smooth operations— saving you significant time and money by resolving potential problems before they escalate.
Frequently Asked Questions
Do I Need to Update My Operating Agreement When Adding New Businesses?
Yes. Updating the operating agreement clarifies how the new business fits into the LLC’s structure and operations.
Do I Need Separate Tax IDs for Each Business Under One LLC?
No, the LLC typically operates under one EIN (Employer Identification Number). However, if the businesses are distinct, it may be worth consulting a tax professional to ensure proper compliance.
How Can I Protect My Intellectual Property with Multiple Businesses Under One LLC?
Registering trademarks and copyrights separately for each business, even if they share the same LLC, is crucial.
Do I Need Separate Bank Accounts for Each Business Under One LLC?
While it’s not legally required, opening separate bank accounts can make tracking each business’s income and expenses easier.
How Can I Minimize Liability If I Use One LLC For Multiple Businesses?
You can minimize liability by maintaining separate financial records, using DBAs, and purchasing insurance specific to each business’s risks.
Can One Business’s Debt Affect the Others Under the Same LLC?
Yes. Since all businesses are under the same LLC, creditors could pursue the assets of all businesses if one accumulates debt.
Can I Change My LLC Structure Later If I Want Separate LLCs for My Businesses?
Yes, you can restructure by forming new LLCs and transferring assets, though the process involves additional legal steps.
Interested in Operating Multiple Businesses Under One LLC? Consult with an Experienced Business Law Professional at BrewerLong Today
Can you have multiple businesses under one LLC? Yes. However, how you should structure your businesses depends on their unique characteristics and circumstances. Before embarking on your next business venture, consult with an experienced legal professional at BrewerLong.
Our skilled business law attorneys at BrewerLong have been helping Florida businesses with formation and other business law issues for over a decade. Contact us online today for a consultation.
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