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LLC and DBA question - multiple businesses and partners
mike8712
subscriber Posts: 2
A friend and I have done a good bit of research both locally for our state
as well as online for the general rules of forming a LLC, and I had a
question in case any of you might know...
We are obviously going to be splitting the ownership of this initial
venture. This is going to be a subscription based service. We also have a
third person helping out and are going to offer a small percentage of
ownership as well.
My question revolves around the long-term. My friend and I have
discussed some other ideas that we may move on to one day, and we are
trying to determine whether we should simply name the LLC for this
business and not choose a DBA name, and then if we end up creating an
additional business, just create a separate LLC? Because there is a 3rd
party helping us for this first endeavor does not necessarily mean that
3rd person will help us in the future, so I thought maybe it is just easier
to create separate LLCs each time? Or do we try to handle it all up front
with our main LLC, and then choose a DBA name that represents this first
business. If that is the case, how would we specify the 3rd party for this
DBA and not for future ones???
I am sure that was worded poorly, but if you follow what I am asking,
thank you for any replies!
as well as online for the general rules of forming a LLC, and I had a
question in case any of you might know...
We are obviously going to be splitting the ownership of this initial
venture. This is going to be a subscription based service. We also have a
third person helping out and are going to offer a small percentage of
ownership as well.
My question revolves around the long-term. My friend and I have
discussed some other ideas that we may move on to one day, and we are
trying to determine whether we should simply name the LLC for this
business and not choose a DBA name, and then if we end up creating an
additional business, just create a separate LLC? Because there is a 3rd
party helping us for this first endeavor does not necessarily mean that
3rd person will help us in the future, so I thought maybe it is just easier
to create separate LLCs each time? Or do we try to handle it all up front
with our main LLC, and then choose a DBA name that represents this first
business. If that is the case, how would we specify the 3rd party for this
DBA and not for future ones???
I am sure that was worded poorly, but if you follow what I am asking,
thank you for any replies!
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Comments
You are right to consider all these issues upfront. You may typically (depending on the state) create as many DBAs for a business as you`d like. So the LLC could be named Mike & Joe, LLC DBA Mike`s Pool Cleaning as well as DBA Joe`s Confections. All owners of the LLC would share the proceeds of both DBAs through the LLC. An important thing to consider is the risk component of the venture(s). Ventures with different risk profiles should be separated into different companies so that potential liability of one does not eat into the profits of the other. Other thing to consider is ownership, as you`ve mentioned. If the different ventures are going to have different owners, you should consider separating them into different companies. One thing you may want to consider is having a "Mike and Joe LLC" that owns "Mike, Joe, and Sally LLC" with Sally being a small owner of MJ&S, LLC and M&J LLC owning the remainder. This would give you the opportunity to create multiple businesses under M&J LLC that each have different risk profiles and ownership interests. You also want to talk with an accountant about the tax advantages you may obtain from various structures.
Michelle Bomberger
Small Business Legal Services -- Bellevue, WA
DISCLAIMER: The information contained in this post is not legal advice. Please contact an attorney familiar with your particular circumstances prior to taking or refraining from any action.
Thanks