Can You Have Multiple Businesses Under One LLC

If you’re an entrepreneur running multiple business ventures at the same time — or are thinking about potentially doing so — you’ve probably wondered whether you can operate all of them under a single LLC.

While it’s true that this approach is technically possible, it’s unlikely to be the best move as it involves a number of key downsides and there are a number of more suitable alternatives.

In this Can You Have Multiple Businesses Under One LLC article, we’ll walk you through the various ways to structure multiple businesses, including their benefits and drawbacks, so you can make an informed decision about what’s best for your situation.

Is it Better to Have Multiple Businesses Under One LLC

Let’s say you own a successful marketing agency and you’re looking to start a separate e-commerce business. Instead of creating a brand new LLC, you could technically run both under your existing one using what’s known as a “Doing Business As (DBA) Name” or “Fictitious Name”.

Under this structure, both ventures could be operated and marketed using different business names without the need for you to create a separate legal entity. 

This is a common approach among business owners for a number of reasons, including that it:

• Is a far simpler model when just starting out (i.e., shared bank accounts etc.)
• Allows you to keep costs down (i.e., by avoiding the ongoing costs of a new LLC)
• Lets you easily try out new products, services, and ideas

However, while it might initially seem attractive, this approach comes with several important downsides. The most significant of these is the heightened liability it exposes you to; this is because by not separating your ventures, the assets of all businesses are at risk if a lawsuit is filed against any one of them due to their shared debts and liabilities.

Additionally, while a DBA allows your business to operate under a name different from its legal one, it doesn’t provide you with exclusive rights to it. As such, another business could legally register the same name — which could lead to customer confusion, brand identity issues, and legal disputes later on.

Picking the Best Structure For Your LLC

When it comes to organizing multiple business ventures, the use of DBAs isn’t typically recommended due to the liability and name exclusivity issues outlined above.

Instead, business owners generally have three primary options available to them:

• Multiple Separate LLCs
• Series LLC
• Holding Company

To help you decide which approach is best for your situation, we’ve broken down each option — along with its associated pros and cons — in the sections below.

Multiple Separate LLCs

For the most part, creating separate legal entities for each distinct business venture is widely considered to be the gold standard approach by tax professionals, attorneys, and business consultants.

Under this time-tested strategy, you’d ideally establish individual LLCs for each:

• Business sector you operate in
• Different type of product you sell
• Distinct service you provide
• Piece of real estate you hold

The primary advantage of this approach is that it creates complete separation between your various business activities — since each LLC has its own distinct identity, all assets, debts, and liabilities remain fully isolated from the others.

Another major advantage is the greater tax and organizational flexibility it offers — you’re free to choose the most beneficial tax structure (e.g., pass-through entity, S-Corp, or C-Corp) and allocation of ownership rights for each distinct venture, since each one has its own associated LLC.

Note: While this strategy provides the strongest protection, it does come with increased costs and administrative complexity — you’ll need to manage separate paperwork, maintain individual bank accounts, and handle multiple annual filings.

Pros and Cons Summary 

Pros

• Stronger legal protections due to isolated assets, debts, and liabilities
• Greater tax flexibility
• Allows for more tailored allocation of ownership 

Cons

• Increased cost of forming and maintaining multiple LLCs
• Much higher administrative burden
• Doesn’t address managing multiple businesses “under one LLC”

Series LLC

Another potential option is to organize multiple ventures under a Series LLC. This is a specialized entity structure that divides into multiple “mini-LLCs” (called series), with each one maintaining its own distinct assets, liabilities, and operations while still being connected to a main LLC.

The primary attraction of a series LLC is that it benefits from many of the advantages of using multiple separate LLCs, yet is far more cost-effective.

Since the series within the parent LLC don’t typically require separate registrations or filings, you can expect to pay far less on filing fees, administrative costs, and annual maintenance as they’ll only need to be paid once.

With that being said, this option isn’t perfect. The series LLC structure is relatively new and untested in the business world, which often creates practical challenges when dealing with banks, attorneys, and accountants as a lack of case law is creating significant legal uncertainty.

Another consequence of its newness is that series LLCs are currently only recognized in the following 14 states:

• Alabama
• Delaware
• District of Columbia
• Illinois
• Indiana
• Iowa
• Kansas
• Missouri
• Montana
• Nevada
• Oklahoma
• Tennessee
• Texas
• Utah

This is a big problem for businesses that operate across multiple different states, as each series may not experience the full legal protection of a typical LLC if it’s conducting business in a state that doesn’t recognize the series LLC structure.

While the recent creation of the Uniform Protected Series Act should help to increase the support for this structure in different states, we still need to wait for this to be adopted in all states to have an effect.

Pros and Cons Summary 

Pros

• More cost effective than using multiple LLCs
• Enhanced liability protection between each “mini-LLC”
• Simplified oversight and record-keeping 

Cons

• Legal uncertainty surrounding this structure due to its newness
• May not enjoy full protection in all states due to limited legal recognition

Holding Company

The final option to consider when organizing multiple business ventures under one LLC is a holding company. This structure creates a hierarchical arrangement of multiple LLCs, with one parent LLC owning and overseeing several subsidiary LLCs.

With this setup — which is also sometimes called an “umbrella company” arrangement — each subsidiary LLC operates independently, managing its own specific business activities while the parent LLC is simply there to act as the owner.

In contrast to a series LLC, a holding company does not operate each of the businesses that it owns directly. While both provide great liability protection between each venture, a holding company often requires more administrative work as it involves ownership of multiple separate entities. 

As such, they can also be expensive to run as you’ll need to maintain multiple LLCs. However, they are more widely recognized than series LLCs — which makes them a very popular option among real estate development companies.

Holding companies can also easily streamline their taxes by consolidating profits and losses across subsidiaries, taking advantage of favorable tax jurisdictions, and claiming deductions for investments in or expenses related to their owned entities.

Pros and Cons Summary

Pros

• Greater limited liability protection
• Excellent business structure flexibility
• Can potentially reduce a business’s overall tax burden

Cons

• The administrative burden of this structure can be complex (e.g., accounting and reporting)
• Higher costs associated with maintaining multiple entities
• Less streamlined management than a series LLC

How Will This Affect Your Tax Obligations

How you choose to structure your various business ventures will have significant implications for your tax reporting requirements and potential tax liability.

We’ve examined how each of these different options can affect your tax situation below.

Single LLC with Multiple DBAs

When operating multiple businesses under one LLC using DBAs, you’ll typically report the overall profits and losses of all your ventures on one of the following tax returns:

• Single-Member LLC: Personal 1040 Tax Return
• Multi-Member LLC: 1065 Partnership Return (with each member filling out Schedule K-1)

While this simplifies your tax reporting obligations, it also means you’ll have less flexibility in how different parts of your business are taxed, which could result in a higher overall tax burden as a consequence in some cases.

Multiple Separate LLCs

If you choose to create independent LLCs for each business venture, you’ll instead be required to file separate tax returns for each entity.

From a tax perspective, this can be incredibly beneficial as you’re free to optimize the tax treatment of each venture’s specific circumstances. However, it’s important to note that this does come at the cost of a higher administrative burden and extra tax preparation costs compared to just running one LLC.

Series LLC

The tax treatment of series LLCs can be somewhat complex due to their relatively new nature. While the IRS generally treats each series as a separate entity for tax purposes, the exact requirements can vary by state.

This can lead to a situation in which some jurisdictions may allow you to file a single return for the entire series LLC, while others might require separate returns for each series.

Holding Company Structure

A holding company structure offers unique tax advantages that aren’t available with other options. This is due to the fact that when multiple LLCs are organized under a single holding company, you may be able to file a consolidated tax return for all subsidiary businesses.

Filing a consolidated return has a number of associated benefits, including:

• The ability to offset losses from one LLC against profits from another
• A potential reduction in overall tax liability
• Greater flexibility in tax planning strategies

Due to the significant impact of your chosen structure on your business’s bottom line, we highly encourage you to speak to a qualified tax professional before making any big decisions.

Can You Have Multiple Businesses Under One LLC FAQs