Do I need a separate EIN and LLC if I’m starting multiple businesses?
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Do I need a separate EIN and LLC if I’m starting multiple businesses?
The businesses will be in the same field. I’m trying to figure out the best way to structure the businesses so that they are individually protected. Can I get one EIN and put all the businesses under it or do I need to get separate numbers for each business? Example I want to open up three different themed food businesses. Should I have one main name The food group and put three separate business names under that or apply for 3 separate EIN with 3 separate LLC’s? Which best protects me and each individual business and are there any cons to one over the other and are there tax benefits or disadvantages to one or the other?
Asked on September 14, 2017 under Business Law, Virginia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
You legally can put any number of business under LLC and EIN. Here are pros and cons:
ONE LLC--PRO: you have enhanced flexibility about using funds from one line of business for another, and for allocating profits and losses for tax purposes, since they are all one entity. You can also more easily achieve economies from shared staff or resources.
ONE LLC--CON: while the LLC will protect you personally, as owner (member) from liability, all the businesses are exposed to each other's liability; a major suit or debt against one can hurt or take down all three.
SEPARATE LLCS--PRO: each business is protected from the other's liability; you can also more easily sell or shut down a business.
SEPARATE LLCS--CON: you can't allocate profits and losses, which can limit your ability to take losses as tax deductions, since each company can only apply a loss (e.g. first year start up losses, since most companies lose money their first year) to the extent of its own profits. You can't move money from one to another, since you have to maintain the integrity of the separate LLCs.
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