Can One LLC Have Two Businesses?

That said, you should still consider the risks and limitations explained below. 

Can you have multiple businesses under one LLC?

There are a few ways to operate multiple businesses under one LLC, including the following: 

• DBAs (“doing business as”). You can register multiple DBAs (also known as trade or fictitious names) for different business segments under a single LLC structure. 
• Series LLC. This structure creates a master LLC that can contain separate entities, known as “series,” each operating as its own business. However, series LLCs aren’t available in every state. 
• LLC holding company. You can set up a parent LLC to own other LLCs. You maintain ownership and control of the holding company, and each subsidiary LLC operates as a separate business.

Broadly speaking, you might run multiple businesses under one LLC structure if the ventures complement each other or serve similar customers. For instance, if you run a film production studio, you might offer script writing and post-production editing services under one LLC to keep your resources in the same place. 

Advantages of having multiple businesses under an LLC

Many business owners run separate businesses under an LLC for the cost and operational benefits, including the following: 

• Cost efficiency. Since you operate one business entity, you’re not responsible for duplicate formation fees, annual reports, or other administrative costs. 
• Simplified management. You can centralize management duties and compliance filings rather than juggling multiple systems for separate entities. 
• Brand flexibility. With DBAs, you can create unique brand identities for different market segments without launching multiple LLCs. 

In addition, one of the main advantages of an LLC is the limited liability it affords its owners. However, when you combine multiple businesses under one LLC structure, this protection becomes more complicated.

Drawbacks of having multiple businesses under an LLC

When you run two separate businesses under two separate LLCs, the assets and income of each individual company are protected from any liability risk that might affect the other company. On the other hand, a single LLC that operates multiple businesses may come with the following risks: 

• Shared liability. The assets and income of each business are no longer isolated, and each is at risk of any legal claims that might be directed against the other.
• Complex financial tracking. You’ll need to track each revenue stream flowing through your LLC and separate the income, expenses, and profits for each business line. 
• Potential brand confusion. Operating multiple business identities under one LLC can confuse customers if they’re not aware these brands are all from the same source. 

Among these, shared liability is the most significant drawback. For instance, say you run an editing business using the same LLC that operates your dog walking business, and one of the dogs you're walking gets injured while under your care. The assets and income belonging to your editing business may also be exposed to any legal claims which might be filed against your dog walking company as a result of the incident.

How do I put multiple businesses under one LLC?

It may be tempting to start up that second business under the umbrella of your current LLC, but it often isn't a wise business move. 

While operating both businesses under one LLC may offer you some shortcuts, such as simpler business administration and only one annual filing fee, in the long run, these shortcuts are probably not worth the increase in potential risk.

That said, if you decide you want to run multiple businesses under one LLC, there are a few different ways to achieve this and you’ll need to pick the method that works best for your situation. 

Single LLC with multiple DBAs

If you haven’t already, you’ll first need to register your LLC with your state’s Secretary of State (SOS) or similar agency that handles business formations. Generally, you’ll need to pick a unique business name, appoint a registered agent, and complete the articles of organization. 

Once your LLC is registered, you can file DBAs through a DBA registration service or by following these general steps (although, the exact process depends on your state).

1. Search available names: Conduct a name search to confirm your desired DBA name(s) are available for use. 
2. Review state requirements: Read your state’s specific naming rules, including any publishing requirements or waiting periods, before you can use the DBA. 
3. Locate required forms: Find, obtain, and complete the DBA registration forms through your state’s business regulation office (such as the SOS). 
4. Submit registration: File your completed forms with the SOS, including any required fees. 

Once you’ve met your state’s requirements and receive approval, you can begin operating your businesses under their respective DBA names. 

Series LLC

A series LLC consists of a parent (or master) LLC and multiple sub-LLCs (or “series”) operating underneath it. Each series is a distinct entity with separate business assets, liabilities, and management structures, but it’s worth noting that series LLCs are only available in some U.S. states. 

If your state allows this structure, you’ll generally follow a similar process to creating a regular LLC. Then, you’ll establish individual series by filing the appropriate documentation (if required) and maintaining separate bank accounts and business records.

LLC holding company

A holding company LLC is an LLC that doesn't have any operations—its main task is to own other companies. Unlike a series LLC, which creates sub-LLCs within a single structure, a holding company actually owns separate, fully formed LLCs. Each LLC under the broader holding company has complete operational independence and its own liability protection. 

In other words, different businesses can operate as their own LLC while still being connected through the holding company’s ownership. 

How does an LLC holding company work?

An LLC that serves as a holding company does not run any operations of its own. Its primary task is to hold the ownership of other companies. In most cases, the holding company LLC will also own most of the assets required to operate the other LLCs it owns. These other companies then lease the use of these assets from the holding company LLC.

For example, if the holding company LLC owns an LLC that runs printing operations, the holding company LLC might also own the printing equipment required by the printing company to run its business. The printing company, in turn, leases the printing equipment from the holding company.

By structuring matters in this way, you obtain two levels of protection. The LLCs owned by the holding company LLC provide limited liability to their owner, the holding company. Since the holding company is also an LLC, it provides its owners with limited liability protection.

It does require a certain level of effort to maintain a proper holding company LLC structure. It's important that each LLC—the holding company LLC and the LLC(s) it owns—be properly maintained, with required government filings kept up to date.

It's also important that accounting, property, and income be kept separate in order to keep the limited liability protection afforded by each LLC intact.

Separate LLCs make sense

While it might seem tedious or require additional effort to set up a separate LLC for your new business idea, it's often a better choice than running both businesses under your current LLC.

There is a bit of paperwork involved in forming an LLC, but the benefits of doing so far outweigh the increased risk of running two businesses under the same LLC. Here’s why:

• Asset protection. Each LLCs keeps its own liability protection, which means problems in one business don’t threaten the assets of another. 
• Cleaner lines. You can easily separate finances, taxes, and valuations for each business. 
• Future-proof structure. If your new business idea is a viable one, it pays to put thought into the long-term now and set up a separate LLC for future growth. 

Additionally, setting up an LLC isn’t an overly complicated task, nor is running and maintaining one. In fact, LegalZoom can walk you through the entire process to set up a new LLC in your state. Just answer a few questions, and we’ll help you file your formation paperwork for no cost besides your state’s filing fee. 

FAQs

Can an LLC own another LLC?

Yes, most states do not restrict who may own an LLC. If your state does not restrict the ownership of LLCs, it means an LLC may be owned by an individual, a corporation, or another LLC.

How many DBAs can an LLC have?

There’s typically no limit to the number of DBAs an LLC can register—unless your state specifies otherwise. A DBA is simply a registered trade name, so you can usually register multiple DBAs as needed.

Is it better to have separate LLCs for different businesses?

While the answer depends on your circumstances, operating under separate LLCs generally provides stronger liability protection for each business venture. Put simply, legal or financial issues that affect one business shouldn't impact the operations of your other companies.

Can I use one EIN for multiple businesses?

No, each taxable legal entity needs its own employer identification number (EIN). However, if you’re operating multiple businesses as DBAs under a single LLC, you can use that single EIN for all related business activities, as they’re part of the same legal entity.

Are there other ways to legally structure multiple businesses?

Besides the structures we’ve discussed (series LLCs, holding companies, and DBAs), you can look into forming different types of corporations, partnerships, or joint ventures. Or, you can create distinct entities (e.g., LLCs or corporations) for each business you want to operate.

Belle Wong, J.D. also contributed to this article.