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!
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?
Lemon Law Attorney
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
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Estate Planning Attorney
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.
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