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5 Replies Latest reply: Feb 25, 2010 10:50 PM by letsmakedough RSS

One LLC starting another LLC

Graytbiz Newbie
Currently Being Moderated
My Businesses all revolved around technology services

I have one LLC (LLC1) that I am the sole "owner" of and LLC1 and I created another LLC (LLC2).
LLC1 is the holding Company and LLC2 is the operating company. Although I think I messed up when I made myself part owener with LLC1 of LLC2. (I hope this is able to be followed.)
I have ended up only using LLC2 to have a DBA (because I don't like the name I chose for LLC2). I have recently decided to completely change my business model and appearance. I am now looking to start another LLC with the new company name to start doing business with. (LLC3)

When I started LLC1 I aquired an EIN from the IRS and opened a bank account. I also created a DBA to cash some checks I had recieved for services rendered. I then took some of that money and created LLC2 from LLC1's bank account. I then aquired another EIN and opened an account for LLC2. I also aquired the same DBA as I had with LLC1 and opened a second checking account attached to LLC2's bank account to receive payments and make payments from that account. Since then I have closed the account for LLC1 and am not able to make any more financial transactions from it at this point.

I am now looking to setup this new LLC and am wondering what is the best way to go abou this... I know how to get my own certificate of formation and could register for another EIN if need be.

My new business plan includes
-Technical Services Rendered
-Retail sales of hardware and software
-Warranty repairs
and thats about it.

What is the best line of action for creating this new LLC3 (I am looking to continue to have a holding and operating company)
Should I just Register LLC3 with only LLC2?
Should I create another EIN and open another bank account?
What do I have to do about selling products?
How do I work sales tax?

Thank you for your time,

Justin Gray
  • Re: One LLC starting another LLC
    Bridge Expert
    Currently Being Moderated
    Why are you spedning so much time cretaing LLC's? You sound like you are a small business. One LLC is more than enough. Spend more time growing your businesses and less time forming LLC! Best of luck.
  • Re: One LLC starting another LLC
    alytus Apprentice
    Currently Being Moderated
    he's right, you only need one LLC, work on that. then mabey if you hit a million dollers per year then open another one.
    • Re: One LLC starting another LLC
      UncleLeon Apprentice
      Currently Being Moderated
      Alytus and Bridge, I respectfully disagree.

      Especially if your operational LLC is likely (or reasonably possible) to be sued, or to have claims against it.

      Nothing makes a company judgement proof as much as owning no assets. If the operational LLC leases or rents the necessary equipment, vehicles, etc. from another company (LLC#!), the operational LLC has no assets to loose in a judgement or other claim. That is only one example.

      I'm not a lawyer ( and I don't play one on television ;>) ); but there are oftern reasons for complicated organizations.
  • Re: One LLC starting another LLC
    cschmitt11 Newbie
    Currently Being Moderated
    Justin,

    Please contact me privately, I may be able to help you sort this out. I represent a suite of products designed for these situations. chrisschmitt1 at gmail dot com
  • Re: One LLC starting another LLC
    letsmakedough Newbie
    Currently Being Moderated
    No one can responsibly advise you until they properly understand your situation. In some cases this is impossible to accomplish in a posting forum.

    The most important thing here is to sort out what you are attempting to
    accomplish. Creating a business entity (e.g. LLC,) is usually only
    "one" tactical aspect of a larger strategy. Annual state
    business registration costs and local compliance fees add up. Each
    entity you create comes with tax and fiduciary obligations that can
    become quite expensive. Be careful.

    If you'd like, send me a succinct email explaining your goals. I will try to assist if possible.

    globalfinacing1@aim.com

    Best of luck and keep pushing forward.

     

     

    "Unless your practicing your draw, never pull a trigger before you have a target in your sites."
    • Buffalo Bill

     

     


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