If one has a holding company, what should be done to create the operating company for it?

No, typically your attorney would create a separate LLC that is either a subsidiary pass-through or owned directly by the holding company's owners.

I hope this helps1

Ron Cappuccio

If you do not like this answer or disagree, please look at one of the other answers provided. It is not necessary for you to try prove this answer is "wrong" or something with which you do not agree. This is a free service for you based on limited facts. Nevertheless, many times you need to consult an attorney with the details to get actual advice specific to your concerns. Do not put too many details in your questions or comments because this makes the information public and could hurt you. Government Regulations contained in IRS Circular 230 regulate written communications about Federal tax matters, including e-mail, between us and our clients. This is another attempt by the government to limit your rights and to extend the control of government over individuals and businesses. Nevertheless, such communications are either opinions or other written communications. This is not an opinion. It is other written communication and was not written to be relied upon, by itself, to avoid any tax penalties. In order to receive assurances of protection from tax penalties from a written communication, you should get an opinion letter. If you would like to discuss an opinion letter relating to any matter, please contact me and I will explain what is involved and what it will cost.

A holding company is traditionally used only to hold investments - in this case, the assets or ownership interests of the operating company. A "DBA" is not a business structure - it is merely an assumed name for an entity that has a different legal name (for example, XYZ Inc dba ABC Business), The operating company should be a legal entity that is a separate entity from the holding company, otherwise the holding company may be held liable for the liabilities of the operating business which would defeat the purpose of using a holding company. There are many ways of structuring your business, and how it is structured depends on information that is not included in your fact pattern. How your business structure is taxed depends on its structure - so a complete discussion of the business and tax structure is best handled by seeking the advice of a knowledgeable attorney.

Anything contained in this response is for informational purposes only and neither the author nor The Ornelas Firm PLLC ("Firm") makes any representations as to the accuracy or completeness of anything contained in this response. Nothing herein shall be interpreted as legal advice from the author or the Firm, or as creating an attorney-client relationship between the solicitor and the author or the Firm. Neither the author nor the Firm will be liable for any losses, injuries, or damages from the display or use of this information. You should consult an attorney whenever confronted with a serious legal issue.