Can you have two businesses under one LLC?

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Yes, you can have multiple businesses under one LLC. This is accomplished by simply running all business activity within one LLC.

Whether that LLC has any DBAs (Fictitious Names) is up to you. Meaning, you don’t have to file a DBA to run multiple businesses under one LLC, but you certainly can file a DBA (or multiple DBAs) if you’d like.

You’ll want to look at the pros and cons of one LLC versus multiple LLCs. It would also be advisable to speak with an attorney about the details of your situation and what you’re trying to accomplish.

Running multiple businesses under one LLC

Pros:

Cons:

  • liability risk could be larger (all liability under one “roof”)
  • non-separate finances and books could be confusing

Among our readers, we usually see people fall into two groups.

• The first is those who have little money, perceive their risk to be high, and are testing out business models and how to make money. They’ll often have multiple business activities under one LLC.

• The second is a more experienced business person. They’ve established profitability or are confident in what they’re doing. They decided to “do it right” from the start, form two LLCs, and keep the liability separate.

While there are more pros listed above than cons, we often see more experienced business owners choose to separate their liability exposure and set up a different LLC for each business.

Am I required to register a DBA for my LLC?

No, you don’t have to register a DBA/Doing Business As for your LLC.

Note: Depending on your state, a DBA may be called a Fictitious Name, Trade Name, or Assumed Name. They all mean the same thing though; think of it as a “nickname” for your LLC.

(related article: do I need a DBA for my LLC?)

If you want to have one LLC that has multiple businesses under it, sometimes people prefer to register a DBA for each type of business activity. Alternatively, the LLC could just do business under it’s true LLC name.

Again, the choice is up to you though. You’re not required to register a DBA for your LLC’s business activities, but you can if you’d like to.

Is it better to have 2 LLCs instead?

Many people prefer to limit the liability, and therefore would choose two LLCs instead of one.

If you have one LLC doing multiple different activities, the liability exposure could be increased.

For example, if your LLC sells products online and also has a small shop in town, if you’re sued because of an issue that happens with an online customer, that could jeopardize your physical store location.

Example of one LLC with multiple DBAs

Under this setup, there is only one LLC that runs several businesses (each under a different name).

Example: John’s Fresh Produce LLC runs a meat deli shop called “John’s Deli Shop” and a vegetable store called “John’s Fresh Veggies”. Note that there is only one LLC that does business under two different names.

Example of multiple LLCs running separate businesses

Under this setup, multiple LLCs run separate businesses.

Example: Dan’s Bike Shop LLC runs a bike shop while”Mike’s Motorcycle Store LLC runs a motorcycle store. Note that the two LLCs are entirely separate and unrelated entities that run their own respective businesses.

How does this affect my taxes?

For most people, whether you have one LLC or two LLCs, the amount you pay in taxes should be relatively the same. How you file your taxes may vary though.

One LLC:

One LLC with one line of activity or multiple lines of activity will be reporting all income and losses together.

• For a Single-Member LLC (taxed as a Sole Proprietorship) that means income/losses are usually reported on a Schedule C, as a part of your personal 1040 tax return.

• For a Multi-Member LLC (taxed as a Partnership) that means income/losses are reported on a 1065 Partnership Return and then each LLC Member will get a K-1 for their share of income/loss.

(related article: how is my LLC taxed?)

Multiple LLCs:

If you have multiple LLCs, the amount you pay in taxes will be more or less the same, but how those taxes are filed will vary from the above example.

• Multiple Single-Member LLCs (taxed as Sole Proprietorships) will report their income/loss on multiple Schedule Cs, however, the combined amount of Schedule C income/loss just “flows” to your personal 1040 tax return.

• Multiple Multi-Member LLCs (taxed as Partnerships) will report their income/loss on multiple 1065 Partnership Returns and the LLC Members will be issued K-1s (one from each LLC). However, all the K-1 income/loss will “flow” to the Member’s personal 1040 tax return.

Separate bank accounts

If you decide to form multiple LLCs, you’ll not only want to keep all business activity separated, you’ll also want to open separate LLC bank accounts.

Additionally, you’ll want to keep a separate set of books. That can be done via a spreadsheet or online software, such as QuickBooks Online.

We hope this article has been helpful in painting an overview of whether multiple business should be ran under one LLC or multiple LLCs.

Matt Horwitz
Founder & Educator, LLC University®
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! LLC University® teaches people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your business journey.
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Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

2 Comments

  1. Greg M. January 1, 2019

    MATT – Thanks so much for all the invaluable information you and your team have put together for small businesses and LLC’s. It really helps to clarify a lot of questions. My brother owns two real estate properties in the Pittsburgh area and one in Ft. Lauderdale. He and I want to put the properties in one basket and start an import business (Amazon) and be able to deduct the expenses/costs of using the properties for inventory etc. Is this a viable idea? If so where can I get more information on how to do it? Thanks so much and here’s hoping you and your team have a great 2019.

    reply
    • Matt Horwitz January 6, 2019

      Hi Greg, you’re very welcome. Thanks for the kind words. Something specific like this is best to run by an accountant, an attorney, and/or a tax attorney. Far too many details and variables to get into. Hope that helps and thanks for your understanding.

      reply

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