Can You Have Multiple Businesses Under One LLC?


It’s hard enough being a business owner, but when you’re running multiple businesses, protecting the assets of each business entity can be a lot to juggle. It’s natural to wonder, can you have multiple businesses under one LLC? The answer is Yes, and in this article I’ll teach you everything you need to know about structuring multiple businesses.

What Is an LLC Holding Company?

You’ve likely already read a few articles on your quest for knowledge, so you’ve likely seen the words “LLC holding company.” But what is a holding company?

An LLC holding company, or main LLC, is a company (typically there’s only one parent LLC) whose sole purpose is to hold the LLC membership and stock interests of other businesses. A holding company or parent LLC doesn’t manufacture or sell products, and its job isn’t to perform any of the businesses’ daily operations. 

Subsidiary Companies

Subsidiary companies owned by the holding company or parent LLC that perform business operations and make and sell the products are called operating companies. Other subsidiary companies covered by your holding company can hold assets, such as vehicles, real estate, equipment, and other valuables for the operating companies. 

The percentages of the subsidiaries that your holding company owns can vary. Your holding company could own 100% of your subsidiary companies, or 51%. Your holding company needs to own just enough of each of your subsidiary companies and their membership and stock interests that it maintains control of them. You can typically accomplish this by giving your holding company 51% ownership, but if you have a business with a lot of members, the percentage needed for the main LLC to maintain control of the company could be significantly less. 

Each of your subsidiary businesses will have their own management teams and styles that are independent of the holding company. However, it’s the responsibility of the main LLC to make sure the other businesses operate properly. Parent LLC owners can remove or install new LLC members or directors, as well as making major decisions on behalf of each of the subsidiary business entities. 

It’s important to note that parent company owners do not make the day-to-day management decisions for any one business entity, and in this way they keep business separate from LLC membership decisions. This is a great way to run multiple businesses because it simplifies the higher-level decision-making process. 

Holding Company Benefits

This is an excellent method of structuring businesses if you think you may want to sell off business lines in the future. When you have one established LLC for multiple companies, you can sell off one business entity and maintain control of the second business, still covered by the LLC. 

The holding company structure also benefits companies that manufacture a wide array of products. For example, if a company manufactures cosmetics, baby products, skin-care products, and hair-care products, the business owner could make a separate business and DBA for each product line, then cover them all with one giant umbrella company LLC. All the equipment, real estate, and trademarks can be covered in other subsidiaries, as well. Then the day-to-day management of each company and the payments for rent and trademarks are handled by each company’s management team, rather than the parent company. 

Can an LLC Own Another LLC?

Your parent LLC isn’t limited to owning multiple DBAs. You can use one LLC to own other LLCs in much the same way. 

Many real estate investors use this type of business structure. They typically create an LLC for each piece of real estate, and then each LLC is owned by the holding company LLC. This is usually an attempt at protecting each real estate investment, and it’s a fairly solid move. 

However, if the parent company is sued, then all the assets in each of the subsidiary LLCs become vulnerable. But most people consider the protection afforded by creating many individual LLCs and covering them with a parent LLC to be a better option than leaving their real estate investments completely unprotected. 

A lot of charitable organizations favor this structure, as well. If they wanted to focus on more than one cause, they would be free to create individual LLCs that would be covered by the holding company LLC. For instance, if they had different charitable causes, such as benefits for Alzheimer’s, cancer, animal protection, and environmental advocacy, they could create an independent LLC for each cause, as well as a holding company LLC. This means that while the Alzheimer’s LLC and the animal protection LLC are technically two separate LLCs, they’re both owned by the same parent company LLC. 

Who Can Benefit from Having Multiple Businesses under One LLC?

Many business owners choose to use one LLC to cover all their businesses, rather than creating separate LLCs for them all. But is it a good idea for you to structure multiple businesses under the same LLC? 

Inexperienced business owners with several separate companies may perceive their businesses as high risk, even if they’re low earning. So, it makes sense for them to use one LLC for all their business ventures so that they can learn about their business operations without having to manage separate entities. While they’re learning, they also benefit from the liability protection that comes from LLC formation, like training wheels for forming multiple LLCs for each business entity. 

Is It Better to Have Multiple LLCs? 

It’s not necessarily better to have multiple LLCs. Using the separate LLC method simply provides different benefits. 

More experienced business owners typically prefer multiple LLCs, or one LLC for each business entity rather than using the same LLC to cover all their business entities. Once they’ve reached this stage they’re a fan of the separate LLCs because it means greater liability protection. And regardless of the fact that some people would find it to be a pain to form a new LLC every time they start a new business, the benefits of using multiple LLCs rather than one LLC outweigh the minor inconvenience. As someone who has been in the business of helping people find the right LLC formation services for years, I can tell you that it’s rare to see a seasoned business owner who doesn’t use the separate LLC method. 

There are a couple of benefits from having multiple LLCs without a holding company, as opposed to the holding company system. One is that each company is separate, which means that each company has its own bank account and will file taxes separately. Combined finances and taxes can complicate the holding company structure. Another benefit is that the liability of multiple LLCs means that if one LLC is sued, others can’t be dragged into the lawsuit, as well. If you use the holding company structure and someone sues one of the subsidiary companies, the parent company is safe. But if someone sues the parent company then everything it owns is at risk. 

Do I Need to Register a DBA Name for My LLC?

A DBA (Doing Business As) name is a business name used for everyday business operations, listed on signs, websites, and advertisements. It’s typically the business name you present to the world. Some states refer to it as a “fictitious name,” “assumed name,” or “trade name,’ but whatever your state calls it, it’s basically the name you call your business. 

The DBAs for your businesses are a matter of personal choice. Some business owners prefer to obtain separate DBAs not for each business entity, but rather for each business activity. This is helpful for distinguishing between separate services or products, such as an online store and the physical location of a small business so that they’re regarded as separate entities. 

Reasons for using a DBA

Let’s say you have both a brick-and-mortar store and an online shop. If something happens to your online shop, it can compromise your physical store operations, as well. However, if you use multiple LLCs to cover your various business operations and storefronts, you can enjoy greater levels of liability protection. But if you’re starting out and don’t have multiple store types, or service types, then multiple DBAs may not be necessary for your situation.

It’s also a good idea to use an existing LLC to cover various businesses in the same industry. For example, if you have an LLC called Angel’s Pet Grooming, LLC, and you open an online pet supply store as part of your business, you can get a DBA for the pet supply store called something like Angel’s Pet Supplies, and use the existing LLC to cover both businesses because they’re similar in nature. 


Here’s how having multiple DBAs under one LLC name looks: An LLC called Joey’s Fresh Food LLC contains two different businesses. One is a deli called Joey’s Deli, while the other is a shop that sells produce called Joey’s Fresh Vegetables. One LLC covers both businesses. 

Here’s how it looks when multiple LLCs are used for separate businesses: Mike’s Bikes LLC is designated for Mike’s bicycle shop, and Mike’s Motorcycles LLC covers his motorcycle shop. There’s a separate LLC for each of his business ventures, and if he starts a new business or decides to structure other businesses, he’ll create a new LLC for them rather than covering them using an existing LLC. 

How Does Having Multiple Businesses under One LLC Affect Taxes?

Of course it’s natural to wonder how structuring more than one business under the same LLC will impact how you do your taxes. The good news is that this likely won’t drastically affect the amount of taxes you have to pay. Here are the differences in how you file taxes if you have one LLC, versus multiple LLCs.

Taxes for one LLC

It doesn’t matter if your singular LLC is reporting for one business or multiple businesses, you’ll combine the income, losses, and business activities of all your businesses and report them all together.

  • If you have a single-member LLC, you’ll report your business’s profits and losses on a Schedule C form when you file your personal tax returns. 
  • If you have a multimember LLC, you’ll report your business’s profits and losses on a 1065 Partnership Return form, then your LLC members will receive K-1 forms so that they can report their incomes and losses individually. 

Taxes for multiple LLCs

If you own multiple LLCs, the amount of taxes you pay won’t be much different, but the methods for filing your taxes are different. 

  • When you have multiple LLCs, you’ll file a separate Schedule C form for each of your businesses, but the combined profit and loss total from all your businesses “flow” into your 1040 form for your personal tax returns. 
  • If you have more than one multimember LLC, you’ll file a 1065 Partnership Return form for each of your businesses and then the LLC members for each of your businesses will file K-1 forms and the income and losses “flow” into their personal tax returns. 

The Pros and Cons of Having Multiple Businesses Under One LLC

By assessing the pros and cons associated with structuring multiple businesses under one LLC, you’ll be better able to determine whether this is the right move for you and your business ventures. 


Here are a few of the advantages of running multiple businesses under the same LLC.

  • Your personal assets will remain protected, no matter how many businesses you own. This is the reason that many small business owners choose to form LLCs. When you set up several subsidiary businesses that are owned by a holding company, you give yourself a safety net. The debts and assets of each subsidiary company are limited to that subsidiary company, so creditors of a subsidiary company can’t come after the holding company seeking payment for the subsidiary company’s debts. 
  • Having multiple businesses under one LLC can make it easier to test business models for multiple businesses. This can be handy if you’ve opened a relatively new business, or if you deal with multiple business industries and you don’t know which structure works best for each of your businesses yet. 
  • It’s simpler during the beginning stages of your business journey to operate multiple businesses under one LLC. (It can get complicated later on, however.) 
  • You’ll enjoy lower formation costs than you would if you were to form separate LLCs for your multiple business ventures. You’ll only have to pay the filing fee once for your Articles of Organization, you have the benefit of single tax filing, and you’ll only have to file one annual report for your various business ventures. 
  • It’s easier for a holding company to get a loan than operating companies, particularly if the operating companies are considered financial risks or are a start-up company. If an operating company needs money, the holding company can get a loan and then divy out the money to the companies that need it. 
  • It creates less risk for investors and allows you to grow your business empire and experiment. When Google restructured, one of the main reasons was easing investor concerns. When Google branched out into other industries, such as robotics and medical research, investors were concerned that if those ventures failed it would affect their investments. But creating various subsidiary companies for each of their new industries kept the risks isolated to the subsidiaries, not the company at large. 
  • Just because you own the business doesn’t mean you have to take part in the day-to-day management of the operating business. Parent LLC owners are in charge of high-level business decisions for their subsidiary companies, such as who should be in charge and how the business should run, but as far as the daily management goes, each operating business has its own managers. 


There are a few drawbacks to using one LLC for multiple businesses:

  • The liability risks could be greater. Of course forming a limited liability company means that you have some degree of limited liability protection to protect your personal assets. However, operating multiple businesses under one LLC magnifies your liability risk because all your business assets are covered under your LLC’s assets. The only real way to mitigate this liability risk is to form separate LLCs for your separate businesses. 
  • The finances of your businesses are conjoined. Juggling multiple bank accounts may seem tricky until you’ve dealt with the business activity of three (or more) different businesses being taken out of one account. In this regard, separate bank accounts for each individual business can be a real boon for any business owner. 
  • If you don’t own 100% of the subsidiary company, you’ll have to deal with minority shareholders, which can prove quite bothersome. The management team of an LLC isn’t required to be made up of a panel of experts, which is disheartening. These managers can make critical decisions for the business, yet may have no understanding of how the decisions impact the business or why certain decisions may not be the best idea. 
  • Using a holding company structure is more complicated than creating a single-entity business structure. Understanding the inner workings of a holding company and its subsidiaries, as well as all the legal and tax implications associated with this business structure, can be confusing even to those who have experience with it. For large companies, it can quickly become difficult to keep track of the business formation of several subsidiaries, as well as which subsidiaries the established company funds and who’s in charge of accepting legal documents for each business. Some of this can be accomplished by hiring a good registered agent service. For more on what a registered agent is and what they can do for you, check out my article on the Best Registered Agent Services

How to Create a Holding Company

After you make the decision to use the holding company structure for your business, it’s time to learn how to create a holding company. If you’re creating a holding company structure for a new business from scratch, then it will require the formation of at least two businesses. You’ll need to consider the following for each business you create: 

  • Choose the structure of the business. Obviously one of the businesses (the holding company) will be an LLC. But you have to make a decision about whether your subsidiaries are going to be LLCs as well, or if they’ll simply be subsidiary companies. You can even structure your subsidiary companies as corporations. 
  • Choose how your businesses are taxed. This is as important as choosing the structure of your businesses. The decision here is whether each business should be taxed as a separate entity or as pass-through entities. Of course, if you choose the holding company structure, that involves structuring your subsidiary companies as LLCs as well, and the rate at which you’re taxed won’t differ much from that of a multiple, separate LLC structure, but there are many options to consider and they all have benefits. 
  • Choose where each business will be formed. The regulations regarding business formation vary from state to state. Some states require more formation red tape (like publishing a notice of formation, obtaining business licenses, or drafting your own Articles of Organization form) and charge expensive filing fees, while others make the formation process a breeze and have low start-up fees. If your businesses conduct business outside their formation states, they’ll need to file as a foreign LLC. The rules for a foreign LLC are much like those of a domestic LLC, but some states charge higher fees for foreign LLCs. It’s important to do some research before you make a choice about which state you form your businesses in. 
  • Choose a name for each business. This is important because you’ll need to list each subsidiary business that your holding company will cover by name. Some states have many rules and restrictions about what business owners in the state can name their companies. Be sure that you check the rules about naming businesses in your state, and run a business name search on the governing authority’s website (such as the Secretary of State) to double check that no one else is already using it. 
  • Choose a registered agent for each LLC. If you’ve chosen to form an LLC for each subsidiary business, as well as your holding company, then you’ll need a resident agent for each LLC. You could easily choose one LLC service to cover them all. In fact, if you choose a national registered agent then you can sign up for registered agent services in multiple states or for multiple businesses. To learn more about registered agent services, check out my article about the Best Registered Agent Services.

Holding Companies Through Mergers

Creating a brand new holding company from scratch isn’t the only way to form holding companies. Another method is through a merger. A merger is when an existing company purchases the majority of another company’s shares so that it has control over the company. 

Mergers are typically beneficial to both companies, for a couple of reasons. 

The parent company can maintain the controlling shares of the business at a low cost with a merger. Mergers typically cost less than buying a company outright. 

While mergers mean that the parent LLC won’t have full control of the company because there will be minority shareholders to contend with, it does give them just enough control to make business decisions for the company and add or remove managers, as well as dictating how the company runs. 

The reason mergers are beneficial to the operating company is that they get to continue operating the business, even if someone else owns most of it, and they’ll have a say in how it’s run. In many instances the operating company’s owners can’t afford to fund the business and keep it open, so a merger can potentially save the company. Even better, the day-to-day management of the company likely won’t change much. While the parent company takes care of major business decisions for the company, the management team of the operating company will take care of the day-to-day tasks and decisions.

The legal procedure for mergers is quite complicated because there’s more than one way to perform a merge. If you’re going to buy a company to convert into a parent company, then you’ll need to make the purchase, gain control of the board of LLC members, and call a vote to change the company to a holding company. Then you’ll need to re-design the company’s Articles of Organization, decide on a new company name, and make some decisions about the company’s stock. 

It’s also a good idea to hire a law firm or attorney for legal or tax advice, as well as help with making sure the documents you’ve drafted are legally enforceable and compliant with state regulations. For more about online legal services, check out my article on the Best Online Legal Services. Once all of that is done, you can call a vote to acquire the operating company’s majority shares. 

In Summary

Can you have multiple businesses under one LLC? Absolutely! Many business owners actually prefer this business structure. There are a lot of advantages to the parent company system, such as cheaply acquiring a new subsidiary business or having a hands-off role in the management of a business. If you’d like to know more about LLC formations services, check out my article on LLC Services.

If you want to learn more about how to form an LLC, click here.

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