Business owners who have multiple companies may be thinking of ways to manage those various organizations, especially for legal and financial purposes. One idea is for business owners to think about forming a limited liability company as an umbrella for the multiple companies they own. Business owners can form an LLC for each company or form one large LLC to act as the parent organization for all the other companies. This article will examine what the benefits will be of forming an LLC to own an interest in multiple companies and help business owners decide what is the right option for them and their companies. Whether or not the LLC will work best for multiple companies will depend on the individual business owner’s unique situation.
The Benefits of Forming an LLC for Multiple Companies
A primary reason for considering the use of a parent LLC is for tax purposes. Some business interests may have lower income levels that would not otherwise be earning enough to justify a more complex tax structure, but by combining those incomes with incomes of other business interests you have could allow some tax savings. You should definitely make sure you are working with a good accountant or CPA to do this.
Separating business interests into separate LLCs is a great way to diversify the legal liability between them, but it also means you are running separate businesses. Improving your legal protections is never going to be free. It will cost you time and money to do so. The parent LLC may at least be able to help you from a tax standpoint. If the business owner does decide to create multiple LLCs, there is no limit on how many can be owned by a parent LLC.
The Cons of Forming an LLC for Multiple Companies
A con side of forming an LLC as a parent for multiple companies is that if the finances of all the entities being together, the accounting records can become confusing and may cause trouble for whoever is handling that. However, this can easily be dealt with if the business owners are smart and truly operate each LLC as its own separate company, financial records included. All the information a business owner will need to form the LLC for the multiple companies can easily be accessed on a website for services that help people with LLCs.
Another con would be that the business owner is now creating a paper link between the businesses. If records are not well kept, and piercing the veil avoidance steps not followed, they could all be viewed as a single business.
Online Services That Can Help with LLCs
When business owners are actually ready to form an LLC for their multiple companies, they can get information from an LLC creating service found online at various websites. The websites can help the business owners create their LLC or multiple LLCs (if desired) to be the covering for their other companies. Services provided by companies such as QuickStart Docs will give business owners all the information they need to do what needs to be done with LLCs without having to go through an attorney to get it done. Whether business owners want one LLC, individual LLCs, a holding company, or a separate series, services are available to them online to get the job done.