Keep Ventures under ONE Structure or Form Multiple Business Entities

[LindseyInteractive]

Hello Guys,

I am new here to the forums and I am needing some input from others here on the forum.

I started my business (Lindsey Interactive, LLC) about 2 years ago as an Internet Marketing Company that specializes in things such as Web Design, SEO, Social Media, Advertising, etc.

However, as time as went on, the business entrepreneur has started to want to branch out into different ventures as well, such as Retail, Property Management, Investments, etc.

So, my question is this....should I just keep them ALL under Lindsey Interactive, LLC and keep all agreements, revenue coming into one company there, or is it best to really open up individual LLC's for each individual venture/industry.

I have heard of people doing it both ways, what is your thoughts, which do you feel is best and why?

[BizAdvisor]

Personally, I would only keep businesses of similar industry under the same LLC umbrella. Having multiple, unrelated businesses under a single LLC not only creates branding issues, but it also stirs up a few liability issues.

When you have multiple businesses under one LLC, together, they form a single legal business entity. This means if something happens to one business, they can all be held liable. Insurance can also be an issue as well since there are multiple businesses with different insurance needs and or requirements... Yet they all have to somehow fall under the same, single insurance policy since insurance companies consider these multiple businesses to be one legal entity. This may leave you paying too much for insurance or perhaps being under-insured.

No doubt, there are benefits for similar businesses to be under one LLC, but when you start trying to combine horseshoes and hand grenades... Perhaps it's best to just keep them separate.

[LindseyInteractive]

Personally, I would only keep businesses of similar industry under the same LLC umbrella. Having multiple, unrelated businesses under a single LLC not only creates branding issues, but it also stirs up a few liability issues.

When you have multiple businesses under one LLC, together, they form a single legal business entity. This means if something happens to one business, they can all be held liable. Insurance can also be an issue as well since there are multiple businesses with different insurance needs and or requirements... Yet they all have to somehow fall under the same, single insurance policy since insurance companies consider these multiple businesses to be one legal entity. This may leave you paying too much for insurance or perhaps being under-insured.

No doubt, there are benefits for similar businesses to be under one LLC, but when you start trying to combine horseshoes and hand grenades... Perhaps it's best to just keep them separate.

Thank you for getting back in touch with me, I really appreciate it. I believe alot of what you say to be true, and hence the reason I am wondering if I am making the right decision or not lol.

I look forward to hearing more thoughts on the subject as well.

[Business Attorney]

I agree with BizAdvisor. While some people are too quick to form new entities for every slight variation of their business, when you truly have a completely different business, it generally makes sense to put it in a separate entity. In your short list, those businesses are about as different as a business can get - web design and property management have very different risks.

Even if you are not particularly concerned with exposing the assets of all of the businesses to the liability of one business, if you ever want to sell just one business or bring an investor in who is only interested in one business, you cannot unscramble the egg. The buyer or investor may be concerned that the business she is buying or investing in has exposure to the liabilities of your other businesses, and there is no way to limit that liability once it exists.