Inherently, entrepreneurs are builders. Their dreams rarely stop with just one business venture; and one good idea can often inspire many more. As your ambitions grow, you might find yourself wondering if you need to create new business entities for each venture, or if that limited liability company (LLC) you’ve already established could be the foundation for expanding your empire.
Although operating multiple businesses under one LLC is a strategy that can save time and money, it does have risks and drawbacks. Learn the key considerations that can help you decide if multiple businesses will or won’t fit under a single LLC.
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Can you have multiple businesses under one LLC?
Yes, you can have multiple businesses operating under one LLC. It’s a strategy used by many business owners to streamline operations and reduce administrative overhead.
Traditionally, entrepreneurs running multiple businesses would simply set up an individual business entity for each venture—meaning each business was its own LLC. But running multiple businesses at once can be costly and inefficient. Separate LLCs require separate formation fees, operating agreements, annual reports, and bank accounts.
3 structures for multi-business LLCs
There are several ways to structure multiple businesses under a single LLC: A parent LLC or holding company, a series LLC, or registering a “doing business as” (DBA) business name. Each of these approaches offers distinct benefits and limitations.
1. LLC with a DBA
The simplest way to run multiple businesses under one LLC is to use a DBA (“doing business as”) filing, also known as a fictitious business name or trade name. A DBA lets a single LLC operate multiple brands under different names while maintaining a single legal structure. This is a cost-effective approach that enables you to use separate brand identities without creating a whole new business entity for each.
For example, a clothing retail business might operate an online boutique under one DBA name and a separate t-shirt line under another—both under the same LLC.
LLC with a DBA considerations
While DBAs offer simplicity and branding flexibility, they don’t provide any additional liability protection between brands or special protection of personal assets beyond those offered by the basic single LLC structure. Since all DBA operations fall under the same legal entity, a lawsuit or financial problem in one business line could potentially impact all others operating under the same LLC.
Additionally, some states have specific registration requirements and renewal deadlines for maintaining DBAs. As with standard LLCs, if you are required to register as a foreign LLC in a given state—like California—a DBA that does substantial business in that state must also be registered. (Note that in US business and legal contexts, the word “foreign” refers to both out-of-state and international entities.)
This requirement is usually aimed at businesses that use a DBA to specifically target customers in a given state. Let’s say you run a Nevada-based online dog-walking agency called “Las Vegas Pet Buddies LLC,” and you expand it into California under the DBA “SoCal Pet Buddies.” Since the DBA specifically targets California customers, the LLC may need to register as a foreign entity in California.
Generally, selling products or services to customers in multiple states via an open ecommerce platform won’t require you to file your DBA in each of those states. But it’s always a good idea to consult with a legal or tax professional.
2. Series LLC
A series LLC allows a business owner to create multiple legally distinct “series” under one LLC. Each series operates as a legally separate entity with its own business assets, members, and liabilities—similar to separate LLCs but with reduced formation costs and simplified management.
This business structure is relatively new in the US and allows companies to segment liabilities and assets into smaller companies within the company. It was first introduced in Delaware in 1996.
Series LLC considerations
The primary risks associated with series LLCs stem from their relatively new legal status and limited recognition across jurisdictions. The series LLC model is only available in some states, including Illinois, Texas, Utah, and Virginia, as well as in Washington, DC. Some states, like California, don’t allow for the local creation of series LLCs, but they do recognize those formed in other states. These out-of-state series LLCs can do business in these limited-recognition states, usually by registering as a foreign entity with the secretary of state’s office.
Given how new the series LLC is, there is limited case law testing the liability shields between series. This makes their effectiveness in court less predictable than traditional separate LLC and parent LLC structures. As with parent LLCs, series LLC owners must maintain impeccable financial records. Additionally, while it’s not required, it’s advisable for series LLCs to obtain separate employer identification numbers (EINs) for each series if they want to maintain payroll systems that are separate from the master LLC.
3. Parent LLC or holding company
A parent LLC or holding company is the most complex arrangement for managing multiple businesses through one LLC. In the US, a holding company is a business venture that does not engage in day-to-day business operations but exists solely for the purpose of owning assets or other businesses. The parent LLC operates as a separate legal entity that owns and controls one or more LLCs. These multiple LLCs owned by the parent LLC are called subsidiaries.
In this structure, the parent LLC can apply centralized management to multiple LLCs. At the same time, each subsidiary’s liabilities remain separate from both the parent company and the other LLCs it owns. The parent LLC can provide funding, handle major financial decisions, and collect profits from subsidiary LLCs while maintaining a protective legal barrier between different ventures.
Parent LLC considerations
Parent LLCs offer robust asset protection but come with risks and challenges. To maintain the legal separation of entities and the liability shields between them, business owners must keep meticulous records. Any commingling of funds or failure to operate subsidiaries as truly independent businesses could “pierce the corporate veil,” as attorneys and judges like to say, exposing the entire organization to liability.
Forming an LLC holding company can take a bit more time than a standalone LLC and may be subject to more scrutiny by federal and state governments. Unfortunately, some business owners have used the parent-subsidy business structure to evade taxes through artificial profit shifting or to conceal assets. These cases have prompted regulators to look closely at parent-subsidy relationships.
Advantages of running multiple businesses under one LLC
There are a number of advantages to running multiple businesses under one LLC, though they depend on which structure you choose.
Simplified tax filings
There are some tax advantages available for business owners that structure multiple businesses under a series LLC or DBA. Generally speaking, these structures let you file a single tax return for the original or master LLC, which can result in significant time and cost savings. However, some states (like California) require each series to file its own tax return. Some also require LLC owners to pay an annual operating tax, but typically only the master LLC is subject to it.
Reduced costs
Operating multiple businesses under one LLC in the form of a series LLC or DBA can help you save on legal fees, costs associated with hiring administrative help, and compliance expenses that otherwise would multiply with each new entity. These two structures also allow for shared resources, like office space and sometimes even staff.
Ease of management
All structures—parent LLC, series LLC, and DBA—can enjoy streamlined decision-making processes because a single, centralized management team can quickly implement policies across subsidiaries or series, eliminating duplicative meetings and approvals needed for separate LLCs. This can be especially helpful in situations where multiple members co-own one or more LLCs.
Although combining multiple businesses under a single LLC won’t necessarily eliminate all of the costs associated with the traditional approach, it can cut down significantly on duplicative administration and organizational headaches.
Disadvantages of having multiple businesses under one LLC
There are also some risks and drawbacks of running multiple businesses under one LLC. Some of them are:
Higher risk of shared liability
If rules against commingling of assets or operational overlap aren’t followed closely, subsidiaries or series could lose separate limited liability protection—meaning a lawsuit or debt from one business venture could jeopardize all. It’s important to note that non-permissible operational overlap will vary between structures—for example, sharing staff between a master LLC and one or more of its series is generally fine, but sharing staff between parents and subsidiaries could run afoul of labor laws and financial transparency regulations.
Operational challenges
Managing diverse business operations under one entity can create difficulties in branding, marketing, and customer relationship management. Different businesses may require different operating procedures, employee policies, or quality standards—all of which can become unwieldy under a single structure.
Further, housing multiple business entities under one LLC complicates exit strategies. If one component business becomes unviable, you can’t simply dissolve it. Instead, you may have to amend filings with state business and tax authorities and carefully document how its assets are distributed to surviving entities.
Increased scrutiny by financiers
Banks, investors, and potential business partners may hesitate to engage with multi-business LLCs if it’s difficult for them to evaluate the financial health of the entire business. This is especially true for the series LLC, which is still a new business entity in the few states where it is available.
5 steps for running multiple businesses under one LLC
- Register your LLCs with the state
- Obtain an EIN
- Maintain separate books and records
- Check if new business licenses are needed
- Monitor insurance coverage
Managing multiple ventures or brands under one LLC requires organization, strategic thinking, and consistent record-keeping. Here are some essential steps and best practices to keep your multi-business LLC running smoothly:
1. Register your LLCs with the state
Ensure your parent and subsidiary LLCs or series LLC are properly registered with the secretary of state’s office in your state. Additionally, look into the rules for requiring “foreign entity” registration in states where you plan to do significant business.
For parent and subsidiary LLCs, registration will require filings for the parent LLC and each individual subsidiary. For a series LLC, this will require following filing rules specific to series LLC registration in your state. If you opt to use a DBA to operate multiple businesses under a single LLC, there will also be state-specific rules around name registration.
2. Obtain an EIN
An employer identification number (EIN) is a tax identification number issued by the US Internal Revenue Service (IRS) to track businesses’ federal tax obligations. They may also be used by state tax authorities, banks, and lending institutions to track and identify companies.
An LLC using a DBA will require only one EIN. A parent LLC will require its own EIN, and each subsidiary LLC will as well. The IRS does not currently mandate that individual series in a series LLC obtain an EIN, but it may be advisable if the series will have its own employees or open its own business bank account.
3. Maintain separate books and records
Use separate bank accounts and maintain separate accounting records for each business line. Utilizing accounting software with class-tracking capabilities can help. Keep detailed records of transactions, contracts, and business relationships of each venture, even though they share an LLC structure.
If you go the DBA route, it is possible to have a single bank account covering both the original LLC and its DBA. However, in some circumstances, it may make more sense to maintain separate accounts for each. At the very least, you will need to notify your bank that payments made to the DBA should be routed to the account under the original LLC name. The bank will likely require you to show documentation from the state demonstrating your DBA was properly registered. If you are using a DBA to conduct an entirely separate business line from the original LLC, you may need to set up a separate bank account for that line.
4. Check if new business licenses are needed
Check state-level licensing rules to make sure you don’t need new licenses or permits to cover a subsidiary LLC or LLC series. In some cases, a parent or master LLC’s own business licenses may provide adequate coverage, but in some states and certain regulated lines of business, you may need individual licenses or permits for each subsidiary or series. If you opt to operate your business under a DBA, you should notify licensing authorities of the DBA adoption and ensure updated licenses, permits, and database records reflect both names.
5. Monitor insurance coverage
Secure comprehensive business insurance that addresses each business activity. Regularly reviewing policies will ensure you are getting adequate coverage as your businesses evolve, with additional riders for high-risk production activities or professional services undertaken by separate companies, subsidiaries, or series.
Depending on the insurer, for a series LLC, you may only need to obtain coverage for the master LLC, though some may require separate policies for each series. Parent and subsidiary LLCs generally need to obtain their own individual policies.
Typically, an insurance policy for an LLC will also cover its DBA if the DBA is properly disclosed to the insurer. However, if you are using a DBA to conduct a line of business entirely separate from the original LLC, and that line of business has unique risks, it may make sense to pay for only enough coverage to cover the DBA’s activities. A qualified insurance professional can help you determine what scope of coverage is best for your situation.
Can you have multiple businesses under one LLC FAQ
How many business names can you have under one LLC?
There is technically no limit to the number of DBAs one can register under one LLC. But practical limitations can come into play: Each state has its own LLC DBA filing fees and renewal requirements, so costs increase with each new name registered. Some states require you to publish DBA notices in local newspapers, which comes with a fee as well. Each name must be unique within your state and not infringe on existing trademarks.
Can an LLC own another LLC?
Yes, a parent LLC can function as a holding company to own subsidiary LLCs. An existing LLC can also be a member in an LLC with other non-LLC members (individual human owners).
Can one LLC have multiple EINs?
Yes, one LLC can have multiple employer identification numbers (EINs). Each series in a series LLC, for example, can have its own EIN if the business owner wishes.
What is an umbrella LLC?
An umbrella LLC—more commonly known as a master LLC—is a single LLC that operates multiple business lines or owns multiple companies, either through DBAs or by acting as a holding company.
