How would you structure multiple businesses?

Discussion in 'Growing and Managing a Business' started by michaelkingdom, Jul 31, 2014.

  1. michaelkingdom

    michaelkingdom
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    Hello everybody,

    I would appreciate advice on how to structure a company.

    Story: My wife and I are currently starting three separate small businesses. By the year's end they will all be operational.

    Business 1: Home inspection company - this is a field that requires licensing, has exposure to liability and will probably be the most active of the three businesses. The company will consist of only myself with no employees.

    Business 2: Dog walking service - this is my wife's baby.

    Business 3: Home based audio equipment sales Via the Internet.


    I am looking for advice on how to structure a company that will protect me from losing my personal assets in the event of a lawsuit. However, I would like to keep the paperwork and overall costs as minimal as possible. I had been advised to create one LLC with three separate DBAs. Is this the best way to keep things simple while providing legal protection for my personal assets? I might be completely wrong so please let me know your thoughts.
     
  2. Gadsubone

    Gadsubone
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    For marketing, you need to consider the markets and target customers for each venture. Are they synergistic? Are they relevant and will they appeal to the same customer?If so, it makes sense to market them under a shared brand. For example, it may make sense for a restaurant and side wine shop to share the same branding.
     
  3. HBR Consultants

    HBR Consultants
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    Hi Michael

    What country do you live in ?
     
  4. astockwell

    astockwell
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    Hi Michael,

    This response assumes you are in the US. Since each business is so different, I would structure each as its own separate LLC. Fun fact: if you and your wife are the only members of the LLCs, they will probably be taxed as sole proprietorships, which makes tax time a lot easier.

    Separating them all will also enable you to have a much clearer picture of each company's financial performance.

    It is important to understand that the "limited liability" from an LLC is generally just personal protection from creditors (loans, etc.), not necessarily negligence. This is why doctors, CPAs, etc. must carry professional liability insurance (also referred to as "malpractice insurance" or "E&O (errors & omissions) insurance").

    If you are providing a service for which you are supposed to be a licensed professional (or even just walking someone's dog, I assume) and you screw up, you can have exposure personally. So no matter what, I would think you need insurance for businesses 1 and 2 no matter what. 3 would depend on the terms you have with the manufacturer, but I assume any liability would be on them if you're essentially just a reseller.

    Disclaimer: I am not (yet!) a licensed CPA, so I must suggest that you consult a CPA and/or attorney and not just go off of what I said.
     
  5. MikePeterson

    MikePeterson
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    If you have multiple business structures then it will make more sense in your business. If there are various ventures having similar marketing strategies and target the similar customers. For multiple businesses you have to plan for proper target customer and great solutions for any problem needed.
     
  6. Joe328

    Joe328
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    f you have multiple business ventures, it might make more sense to keep your businesses as part of one unified brand if the various ventures share similar marketing strategies and target similar customers. For example, if you offer event planning services and also run a separate website that sells customized invitations, you could host both of these ventures under the same corporate umbrella.
     
  7. webdesignphx

    webdesignphx
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    Just consider the fact that if one DBA is sued for whatever reason and they are all under the same LLC that your other DBAs are in jeopardy because they are owned by the same LLC.
     

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