If you own more than one business, how you structure those companies can affect you from the legal and tax perspectives.
Speak to an accounting professional to understand the tax implications. It also will be helpful to speak with an attorney for guidance on the legal ramifications.
To help you understand some of the considerations to think about when structuring multiple businesses, let's look at three possible ways many entrepreneurs approach the situation:
1. Have a single corporation or LLC and create individual DBAs (“Doing Business As,” also known as a “fictitious name” or “assumed name") for each business line that the company operates.
2. Form separate corporations or LLCs for each business.
3. Create a holding company and form separate corporations or LLCs beneath it for each business.
Each approach has pros and cons, so clients will want to weigh each option carefully before deciding on the route to travel.
Three ways to legally structure multiple businesses: