Westminster, MD asked in Business Formation and Business Law for Maryland

Q: In MD can I use my llc to run an apparel store and for a self nail salon? Do I need 2 trade names under the llc?

I use my llc to run my apparel store but I want to start a self run nail business and I don't want to start a new llc. Can I use the llc to parent the 2 companies ? Do I need to purchase a trade name for each or can I just do one for the nail business and continue operating the llc apparel store as normal ? What is the best way to avoid legal/tax confusion down the road?

1 Lawyer Answer
Mark Oakley
Mark Oakley
  • Rockville, MD
  • Licensed in Maryland

A: Most LLC articles of organization contain a purpose clause that authorizes the LLC to engage in any lawful business or activity, but unless the articles strictly limit the business activity of the LLC, then the LLC can run any type of business it is otherwise lawful for anyone to engage in. The reasons why you might not want to do so has to do with maintaining separate taxing entities for tax liability purposes, and for liability purposes having to do with third-parties suing one of the two businesses and shielding the other business from any adverse judgments. However, if you have adequate insurance and otherwise are not concerned about those risks, then you can run any number of businesses under your LLC. You might find it beneficial to register each business under its own trade name. SDAT charges $25 per trade name, which you would register under your LLC. The LLC files just one set of tax returns and pays just one annual fee. Trade name registrations expire after 5 years and need to be renewed before they expire, and SDT does not mail out reminders, so you would need to keep on top of the trade name expiration dates to keep them in effect.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.