Q: what is the most cost effective way to structure multiple businesses?

A: It depends on whether the businesses are related to one another. It generally makes the most sense to form separate businesses. Each business will have liability protection so long as you keep them separate from one another and will insulate you from personal Liability. If they are indeed connected, you can make the original LLC a parent company. You need to hire a business formations attorney for further insight. You can also ask your accountant their opinion on what gives you the best tax advantage here.

A: When deciding how to structure multiple businesses, the best approach depends on your goals, liability concerns, and tax preferences. Using a single LLC with DBAs for your additional businesses can simplify management and reduce costs since you’ll only have one entity to maintain and file taxes for. This works well if the businesses are low-risk and operate in similar industries.

On the other hand, creating separate LLCs for each business provides better liability protection. If one business faces legal or financial troubles, the others won’t be impacted. This setup can be more expensive due to multiple state filings, fees, and separate tax filings, but it’s worth considering if the businesses are unrelated or carry significant risks.

You could also consider a parent company structure, where your current LLC owns the other entities. This keeps them legally distinct while streamlining ownership. Think about the long-term goals for each business and consult with a tax professional or attorney to weigh the costs and benefits of each structure based on your situation.