QUESTION
What is the best route to take for setting up my small businesses?
Asked on Aug 03rd, 2015 on Business Law - Florida
More details to this question:
I am in the process of establishing 2 small businesses (one being a Professional Organizing business, the other a Decorative Painting business.) I would be the only employee. My cpa suggested I set up 2 separate LLCs under an S Corp. My research suggests I could establish a main LLC with 2 separate dbas for each business. My objective is to cut down on legal fees, paperwork, have 1 tax return, but still be protected. Thoughts? Or is it possible to establish 1 small business that performs 2 different services - as above - marketing to 2 different audiences?
1 ANSWER
An llc is a seoarate legal entity. DBA merely means doing business as, it does not indicate a separate legal entity. The problem with one LLC operating two separate businesses is that each "business" is part of the same entity, andthat entity is therefore responsible for the obligations of each. This could be a problem if one business is profitable and the other isn't. If each business is owned by a separate LLC, it is only responsible for its own obligations. Your personal assets, however, would be protected either way (except under unusual circumstances.) The savingss in legal fees and paperwork may make it worth it to you to have one llc, but you should know the implications.
Answered on Aug 03rd, 2015 at 4:38 PM