Multiple businesses under one LLC/S-corp for purpose of having same tax id number. What are liabilities and how to avoid them?

Asked almost 3 years ago - Portsmouth, OH

I'm the owner of a child care business (a) and in the process of purchasing a second child care business (b). For certain state funded food programs we would need B to have same tax ID as A. I know this is possible and aware of some of the liabilities this would create. So my question is how can I avoid these liabilities?

Can multiple LLCs be under one parent/umbrella/holding LLC and use the same tax id number as the parent LLC?

Two insurance policies?

Thanks in advance!
Jarodd

Additional information

Business A has zero assets and the assets of B will be placed in a separate corporation. With that being said, if either A or B is sued and awarded more than our insurance policy what would be the ramifications?

If A and B has zero assets then whats at stake?

Attorney answers (2)

  1. Ronald Lee Burdge

    Contributor Level 20

    3

    Lawyers agree

    1

    Answered . As soon as you start talking about multiple corporations or companies and how to set them up to your best advantage for liability and tax purposes, you really need to talk to a local Business Law attorney near you who handles business structuring. There is no point in thinking about casual advice when what you need is specific advice for your particular circumstances and there are significant risks or liability questions that you need certain and reliable answers to, based on the law in your state. Avvo attorneys want to give general help freely wherever they can but when specifics matter, as they do in your situation, no attorney can do anything but make a guess without knowing a whole lot more than what you can fit in a single question. And making a guess is not fair to you. You can look for a Business Law attorney here on Avvo under the Find a Lawyer tab. Or you can call your local attorney's Bar Association and ask for a referral to a Business Law attorney near you. If this answer was helpful, please give it a “Vote UP” review below. Thanks for asking and good luck. Ron Burdge, www.BurdgeLaw.com

    Click here for a list of state and local attorney bar associations
    http://www.hg.org/bar-associations-usa.html

    Prefer to talk to a woman attorney? Click here for a list of state and local women attorney’s bar associations
    http://www.ncwba.org/ourmembers-linkstomembers....

    What are attorney bar associations and how do they work? Get Wikipedia’s answer here
    http://en.wikipedia.org/wiki/Bar_association

    This answer is for general purposes only and does not establish an attorney-client relationship. Click the link to... more
  2. C L Huddleston III

    Pro

    Contributor Level 16

    Answered . Good answer by Mr. Burdge. You need specific advice and assistance, not general commentary from the AVVO community. And your advice should come from both your attorney and CPA together.

    Many small business owners think it is easy to file an LLC on their own, or to use Legal Zoom or something like it. Getting a charter from the State is the easy part. You also need a proper Operating Agreement (or bylaws if a corporation) and corporate records book to keep everything maintained in the event of your incapacity or death ... or a lawsuit. Also, not all states have the same laws and court decisions. Although I am an Ohio lawyer (PHS '69, incidentally), we rarely form Ohio LLCs anymore, because the laws of a few other states provide much better liability protection. If you are operating or planning to create a successful business, the money you spend on the front end putting things together properly will be well-spent.

Related Topics

Small business LLCs

An LLC (limited liability company) is a business entity that has elements of both a corporation and a partnership (or sole proprietorship).

Small business taxes

Small business taxes include state and federal income taxes and employment taxes, self-employment taxes, and excise taxes.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

23,550 answers this week

2,859 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

23,550 answers this week

2,859 attorneys answering