Business Structure

justinbelcher13justinbelcher13 Posts: 2subscriber
edited March 2016 in Business Planning
I have a cafe me and 2 business partners all equally own. It is profitable and we are getting ready to open another location. We want the protection of having each a separate LLC for liability purposes. The current location already is setup this way as well. We are looking for a way to structure where we can use the profit form the current location towards the initial losses we will have for the new location. I am looking for the best way to do this while still maintaining 2 separate entities. Our current plan is to setup a C Corp holding company with all 3 of us as equal shareholders. We would then transfer ownership of the LLC's directly to the holding company. Profits should pass through the LLC to the holding company from our current location, and losses would pass through from the new location creating a much smaller net profit and tax liability. This would also allow the holding company to retain earnings because we want to continue to grow additional locations.

Anyone see any flaws with this plan or better options? This is my first experience running a business where I had need for separate entities for multiple locations.

Thanks in advance!
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