Choosing Between LLCs and DBAs
Is it better to have multiple LLCs or DBAs? For liability protection purposes, it is better to have multiple LLCs for each of your businesses. Members’ personal returns should be filed with K-1s. The taxation process for LLCs becomes complicated over time.
A lawyer recommended that I form a C corporation for the media/publication to separate it out since I plan to sell it.
In terms of cost, a DBA is cheaper than registering multiple LLCs. Depending on your state, there are different fees associated with each.
DBAs allow business owners to operate under a different name without changing the company’s name legally.
Costs and Complexity
A holding company can be expensive and generate a lot of paperwork. For example, in Florida, the initial filing fee is approximately $100 for LLCs with annual report filings at $138.75 per year.
You’ll want to look at the pros and cons of one LLC versus multiple LLCs. You should consider if multiple DBAs are the most strategic way to proceed while considering the following issues:
- Higher overall risk by having each “arm” of the business under the same company.
- Complicated tax filing.
- Confusion for customers and vendors.
- Additional costs for each DBA filed.
Operating Multiple Businesses Under One LLC
To operate multiple businesses under one LLC, you can create a Series LLC, use a DBA option, or establish a Holding Company. Each has pros and cons so consult a tax professional or attorney before deciding how to structure your businesses.
Handling Taxation and Asset Protection
The taxation process for LLCs becomes complicated over time. The general rule is: A separate company for each business.
Conclusion
The concept of operating Multiple Businesses Under One LLC offers versatility. Whether through DBAs, individual LLCs, or a holding company structure, it depends on the needs of the owner. Seeking professional guidance and aligning with long-term goals is crucial.
Can one LLC run multiple businesses? Yes, you can use a "Fictitious Name Statement" or a "DBA" for additional ventures.
You can also create a Series LLC, use a DBA option, or establish a Holding Company; each has pros and cons.
Final Considerations
It would be advisable to speak with an attorney about your situation and what you’re trying to accomplish.