Should You Operate Multiple Businesses Under One LLC or Create Separate LLCs?

I get this question all the time:

Can I run multiple businesses under one LLC (with DBA’s), or do I need to create a separate LLC for each one?

It’s a tough question with no one-size-fits-all answer. There are a variety of factors to consider before making this decision, and it ultimately comes down to your specific situation.

The two main factors I focus on with clients are asset protection and business formalities—so let's dive into these to help you make the best choice for your business.

Asset Protection: The #1 Priority

When it comes to running a business, one of the biggest advantages of forming an LLC is asset protection.

An LLC shields your personal assets from business-related liabilities. In other words, if your business faces legal action or accumulates debt, your personal property (think: your home, savings, etc.) is generally protected.

But what happens when you operate multiple businesses under one LLC?

Here’s the catch: If you run multiple businesses under the same LLC, each business is legally tied to the liabilities of the others. For example, if one business faces a lawsuit or debt, the other businesses under that same LLC could potentially be on the hook for covering those liabilities. Yikes, right?

If keeping your businesses financially and legally separate is a priority for you, separate LLCs for each business is the safer bet.

This way, each LLC is a distinct legal entity, so the liabilities of one business won’t affect the others.

Business Formalities: The Administrative Burden

Now let’s talk about the other major consideration: business formalities.

Running multiple businesses under one LLC means you only have to file paperwork for a single LLC, manage one set of records, pay for operative expenses for one business, keep one bank account, and the list goes on…..

This can simplify things and save you a lot of administrative headaches—especially if your businesses are smaller or don't carry much risk.

But if you choose to set up separate LLCs for each business, there’s a lot more to manage. You’ll need to (among other things):

• File for each LLC individually (including annual fees)

• Maintain separate bank accounts for each LLC

• Keep distinct records and track each LLC’s income, expenses, and taxes

• Separate intellectual property (IP) management (think trademarks and copyright)

• Manage different online platforms and third-party services for each LLC.

For many entrepreneurs, this can feel like overkill.

The added paperwork, filing fees, and separate operations can quickly become a burden, especially if you’re just starting out or have limited resources.

That’s why some people choose to operate under one LLC to keep things simple, even if it means sharing some legal risks.

DBA’s: A Possible Middle Ground

If you’re set on operating multiple businesses under one LLC but want them to be distinct brands (with separate marketing, names, or customer experiences), DBAs (Doing Business As) could be the answer.

A DBA allows you to operate different brands or businesses under the same LLC, each with its own forward-facing brand name, while maintaining the same legal structure.

Essentially, a DBA is like a business nickname—it gives your LLC the flexibility to market different products or services without forming separate entities.

However, here's the key point: A DBA is not a separate legal entity. This means that all the businesses under one LLC, even with different DBAs, share the same legal protections and liabilities. If one DBA gets into financial or legal trouble, the entire LLC (and all its DBAs) could be impacted.

So, while DBAs can offer some flexibility, they won’t give you the level of protection that separate LLCs would.

But they’re a great option if you want to differentiate your businesses in the marketplace but aren’t overly concerned about keeping legal risks separate.

Just remember that DBAs are nicknames, so you’ll be using your registered LLCs name for all your legal documents and official business documents.

What’s the Best Option for You?

Ultimately, the decision about whether to operate multiple businesses under one LLC or create separate LLCs depends on your risk tolerance, business goals, and how much effort you're willing to put into the administrative side of things.

Here’s a quick breakdown:

• Choose separate LLCs if:

  • You want to protect each business from the liabilities of the others.

  • You’re comfortable with the administrative burden of managing multiple entities.

  • You want to ensure that each business operates independently (legally and financially).

• Choose a single LLC (with DBAs) if:

  • You want to simplify your operations and administrative work.

  • You’re okay with the risk of shared liabilities between businesses.

  • You’re looking to operate multiple brands or businesses under one entity but don’t mind the lack of legal separation.

And if you’re in doubt, always consult with a lawyer who can evaluate your specific situation and guide you in the right direction.

No two businesses are the same, and your approach to LLCs should be tailored to your specific goals and needs.

Want to talk to a lawyer?

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DISCLAIMER: THIS IS NOT LEGAL ADVICE. THE CONTENT IS BEING PROVIDED FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY. SHOULD YOU NEED PERSONALIZED ADVICE, CONSULT WITH A LAWYER.