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Asked over 3 years ago - San Diego, CA
FlagI own a business that is LLC but not in restaurant business. My husband just signed partnership agreement to open few cafes under LLP with the other 4 partners. He would like to have an LLC instead of being direct proprietor when it comes to liability and taxes for accounting purposes. Since we are married and I already own a business, are there ways to perhaps route things through my business to keep just one LLC and lessen the burden of registering two businesses? We would like to have someone to go to with our accounting and law questions on an ongoing bases if possible who is knowledable about Frenchises, startups and LLPs/LLCs. We are located in California.
In the long run it is certainly better for your husband to establish his own LLC and keep things separate from your LLC and its business operations. This is especially so if he is dealing with four other partners. Also, if your husband is the franchisee, he will need to obtain the consent of the franchise company to transfer his interest in the franchise agreement to his LLC. Franchise companies will not allow him to operate under your LLC - they will require a separate entity to ensure protection of their reporting - auditing, etc. rights.
Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise
San Francisco, CA
The purpose of owning two separate llc's is to reduce risk. If one of the businesses fails, the object is to make sure that the creditors of the failing business do not have the ability to enforce judgments against the assets of the successful one. It does not appear to make sense that you would put your business at risk by combining it with another business (which may be much riskier than your existing business). Your accounting questions should be directed to a qualified cpa and your legal questions should be directed to a competent business attorney.
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