I'm starting a photography business with a partner and we intend to form an LLC ( ABC LLC ) which will be taxed as a partnership and member managed . I already have another LLC ( XYZ LL ) for photography endeavors conducted without my partner . In running two closely related business , I will have some expenses which are clearly for a specific LLC , but some could legitimately be attached to either LLC ( IE education ) . It is unknown which LLC will be more profitable , but both are start - ups . My accountant is suggesting to attach XYZ LLC as the member of ABC LLC , making XYZ LLC the parent .
Estate Planning Attorney
Limited Liability Companies are very popular for small business owners today. The owners of the LLC are its 'Members' - who are the equivalent of Shareholders / Stockholders in a Corporation. The LLC is an excellent way to do business. The answer is YES - an LLC that is a Member of another LLC is a part owner. What percentage that will be will be determined when you and the other person form the LLC and sign an Operating Agreement. I recommend you work with a Business Law attorney in Minnesota to get this done right away. Good Luck !!
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Using an LLC for your business is a great way to help limit your personal liability and separate your business affairs from your personal life and personal assets. It is not uncommon to have one LLC own part of another LLC, giving another level of liability protection and creating the potential for creative tax planning which could ultimately lead to tax savings. In a situation like this it would be valuable to consult with both a business attorney (who can help draft the documents, ie. operating agreement, member control agreement, contribution agreement, etc), and a tax professional. Many attorneys, including our office, offer free initial consultations and I highly recommend taking advantage of one.
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The previous answers you received are accurate. What you need is to consult with an attorney to put it all together.
No attorney-client relationship is created as a result of this submission. The information and answer provided is of a general advisory nature based on the limited information provided and should not be constured as formal legal advise.
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