Can you use one LLC for multiple businesses?

The simple answer is yes, you can use one LLC for multiple businesses; however, it is said to be dependent on whether the risk probabilities of multiple LLCs is more advantageous.

A business can legally have one Limited Liability Company (LLC). The business structure is one that is applicable in the United States. Moreover, the business structure is considered favourable for most businesses, as it combines some of the principles of partnerships and corporations. As such, two of the primary advantages of it are flexibility and the protection of its shareholders vis-à-vis members.

Therefore, the implication is that an individual can start more than one business under the LLC. Moreover, the entrepreneur would then need to start their different business ventures under different names. This is referred to as either Doing Business As (DBA) or Fictitious Name Statement. Moreover, there has not been a stipulation on how many businesses can be started under one LLC.

While the single LLC structure might be highlighted as advantageous, it is believed to be for businesses with a low risk factor. The suggestion is that should the business venture be of a high risk, it is better to invest in a second LLC. This provides the entrepreneur with the opportunity to use one of the LLCs to ensure that the low-risk companies are not impacted if the high-risk business bombs.

Another consideration is the tax implications of a single versus multiple LLCs. It is important to note that the tax will, on average, be the same. However, the difference is dependent on whether the LLC is owned by a single member or multiple members. Additionally, should an entrepreneur have multiple LLCs, then it is advisable to have different accounts for the LLCs.