Yes, you can have multiple businesses under one LLC. You can run two or more businesses under one LLC by either:
- running all the business activities under one LLC name, or
- registering DBAs (“doing business as”), also known as Fictitious Names.
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
- easy to test business models, products, offerings, etc.
- initially simpler (but not if things grow)
- lower costs (one articles of organization and one LLC annual report)
- 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 its 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 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?)
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.
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