Yes, you can run multiple businesses under one LLC, but doing so comes with legal, financial, and organizational considerations that you need to manage carefully.
Many entrepreneurs run multiple ventures-such as selling products online, consulting, and owning rental properties. Rather than creating a separate LLC for each activity, some choose to operate them under a single LLC to save on paperwork and registration fees. While this approach is legal and often practical for small businesses, it has tradeoffs that should be weighed before combining different business activities under one entity.
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How to Run Multiple Businesses Under One LLC
There are a few common ways to structure multiple business activities under a single LLC:
- Single LLC with Multiple DBAs: The most common method is to create one LLC and then register “Doing Business As” (DBA) names for each business line. For example, “Bright Star Ventures LLC” could use “Bright Star Marketing” and “Bright Star Web Design” as DBAs.
- Divisions or Departments: You can operate different parts of the business as internal divisions. These are not legally separate, but you can track their finances separately within your accounting system.
- One Website or Brand Umbrella: Some entrepreneurs maintain a single brand identity but offer multiple services under it, without the need for DBAs, especially if the businesses are related.
Using DBAs is the most organized way to distinguish your different business operations while still enjoying the simplicity of a single legal entity.
Advantages of Using One LLC
There are several benefits to operating multiple ventures under one LLC:
- Lower Costs: You only pay one state filing fee, annual report fee, and one set of business taxes (if applicable).
- Simplified Administration: There’s only one set of bank accounts, EIN, and business records to manage.
- Easier Branding Transitions: You can test and change business ideas without forming a new entity each time.
This approach works well for closely related business activities, such as offering graphic design and web development services, or operating multiple e-commerce product lines.
Risks and Limitations
While using one LLC for multiple businesses is allowed, it does have some important downsides:
- Shared Liability: All businesses under the LLC are legally connected. If one business is sued or incurs debt, the others may also be affected since they fall under the same legal entity.
- Brand Confusion: It may be harder to build distinct brands if everything is tied back to one LLC name in legal or financial documents.
- Accounting Complexity: While you have one tax return, you still need to track revenue and expenses for each business separately to know how each one is performing.
If your businesses operate in different industries or involve high liability (e.g., combining a consulting service with a food truck), it might make more sense to separate them legally into different LLCs to protect each one.
Using Separate LLCs for Each Business
If the businesses are very different in nature, have different risk profiles, or involve separate partners, forming individual LLCs may be the safer option. This way, a lawsuit or financial problem in one business won’t impact the others.
Some entrepreneurs even go further and create a holding company structure-one parent LLC that owns multiple subsidiary LLCs. This is more complex but offers maximum liability protection and flexibility. It’s common in real estate, franchises, and companies with distinct product lines.
DBA Registration Process
If you choose to operate multiple businesses using DBAs, the process typically involves:
- Confirming that the DBA name is available in your state
- Filing a DBA registration with your state or county (depending on your jurisdiction)
- Paying a filing fee (typically $10 to $100)
- Renewing the registration periodically, if required
Keep in mind that DBAs do not create separate legal entities. They are simply alternate names that point back to the same LLC.
Tax Considerations
The IRS does not recognize DBAs as separate tax entities. Regardless of how many DBAs you use, all income and expenses are reported under the LLC’s EIN. However, it is wise to maintain separate accounting records for each business activity to simplify financial tracking and ensure proper deductions and compliance.
You can absolutely run multiple businesses under one LLC, and many entrepreneurs do. It’s an efficient and cost-effective option, especially for related ventures. However, shared liability and brand complexity are real concerns. Consider the nature of your businesses, the level of risk involved, and your long-term goals before deciding whether to keep everything under one entity or separate them into multiple LLCs. When in doubt, consult a business attorney or accountant to make the best structural choice for your situation.
