What to do if I would like start 3 different businesses in my state but wanted them all under 1 company or a parent company?
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What to do if I would like start 3 different businesses in my state but wanted them all under 1 company or a parent company?
Any who how would I go about doing this? Should I start a corporation? If so, which kind? S or C? How would I tie the DBA’s to it? They would be DBA’s correct?
Asked on March 1, 2019 under Business Law, Maryland
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
1) Start either a corporation or limited liability company. For most "small" business--"small" in this context being up to a few million dollars annual revenue, and with one to maybe a dozen or so owners--an S-corp or LLC is preferable to a C-corp because they get better tax treatment for closely held business: there is no "double taxation," since profit is not taxed first at the corporate/business level then again when distributed to the owners, but only once, on the owners' own personal tax returns.
Between an S-corp and an LLC, there is effectively no difference legally (e.g. in terms of liability protection) or for tax purposes. An LLC, however, does involve less paperwork and fewer formalities than an S-corp, and so is most likel slightly the better choice.
2) An LLC (or corporation) can have multple DBAs--you would just register them with your state. Or an LLC can own other LLCs, one for each business. Going the multiple LLC route may be better because that way, each one is insulted from the others for liability purposes: i.e. if one is sued and found liable, the other ones (and their assets and accounts receivable) will be protected.
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