by The Exit Promise Contributors
If 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. How do you create a business structure using one business entity to hold multiple businesses under one corporate umbrella?
Here is one of the simplest and most effective solutions:
How to host multiple companies under one umbrella business structure
This may be done by creating an LLC, S-Corporation or C-Corporation to hold multiple DBAs for the various other ventures that are part of the main “umbrella” business structure.
For example, if someone has three businesses: one consulting service, and two separate websites that sell products related to the consulting work, the business owner could create one overarching LLC or corporation (depending on which choice of business structure provides the most tax advantages) called something such as “Mary Smith Enterprises, LLC” or “Mary Smith Enterprises, Inc.” and then file DBAs (“Doing Business As”) to include each of the subsidiary websites as part of its overall business structure (LLC or corporation), even though they have different names. This is an easy way to structure multiple businesses to potentially minimize tax liability (depending on the business and owner’s tax filing status) and provide added credibility for the business operations.
Tips for structuring multiple businesses under one LLC:
You don’t have to disclose the name of the LLC. If you have multiple businesses that are not seemingly related to each other, you can keep doing business under each business’s name without being legally required to disclose the name of the business which holds the DBAs, (your LLC, corporation or partnership) as part of your marketing.
For example, if Sue Smith runs three companies – “Sue’s Cookies,” “Flowers by Sue”, and “Sue’s Soup Shop,” she can keep using those separate brand names for each business without having to tell anyone that the businesses are actually under the umbrella of “Sue Smith Enterprises, Inc.” Structuring multiple businesses can save on paperwork. Keeping each business separate might be a valid option for certain situations, but it can lead to additional paperwork and expense. Keep all the tax information in one place: If you have multiple DBAs under one LLC or corporation, you can keep the earnings and expense tracking for all of your businesses under that one corporate structure, making it easier to pay what you owe (and save as much as you can) at tax time.
Cover all your bases. Are you going to be doing business under any other names, other than the “obvious” ones? It’s easy to file a separate DBA for each possible permutation of your business name, for example, by filing a DBA for “Sue’s Soup Shop” as well as “SuesSoupShop.com.” By filing an LLC or forming a corporation with multiple DBAs under the business “umbrella,” you may be able to streamline your business bookkeeping and simplify your marketing. Get it done right by structuring your multiple lines of business in a way that maximizes your marketing abilities.
Be sure to speak to experienced legal counsel. If you have any more questions, reach out to the team at ScotchPalm.com—fearlessly connecting the dots for entrepreneurs.
tructuring your multiple lines of business in a way that maximizes your marketing abilities.
Scotch & Palm is a Featured Advisor with Exit Promise. You can find our recent posts by searching for “Exit Attorney”.