When is it a good (or bad) idea to have multiple projects, brands, or businesses in the same LLC?
That’s what we are covering in this week’s episode of Ask Kiff.
The short answer is that you can have them under the same LLC umbrella if you are okay with them impacting each other.
Because if something goes wrong in one project, brand, or business, the law sees no distinction between them. So if something goes bad in one, it’ll impact the rest.
I also suggest that you use the same 10 questions that help you decide if it’s time to become an LLC, to decide if you are okay with having them all in the same LLC. (Read the questions here!)
- Curious about the 13-questions I talk about in the video? You can read them all in this massive resource about if an LLC is right for your business.
- Want my help creating your LLC (or keeping your existing LLC legit)? Then learn more about my LLC course here.
- Want to hire an attorney to create your LLC instead of DIY’ing it? Then watch this episode of Ask Kiff to learn how to find the right attorney.
- Think that you might use LegalZoom rather than hiring an attorney? Then read this blog post about why you should do so carefully.
- Learn more about the artist’s Courtyard membership community here.
Why am I risking bad luck by opening an umbrella in the house?
Because today we’re going to talk about when it is and isn’t a good idea to have more than one brand, project, or business in the same LLC.
Hi, I’m Kiffanie Stahle, founder of the artist’s J.D. A place designed to add ease to the legalese of running your creative business.
Today I’m answering a question from Nicole in Florida. Nicole asks,
I have multiple projects. Can they go in the same LLC?
So there are times when it’s a great idea to have multiple brands, projects, or businesses in the same LLC. And there are times when it’s not such a great idea.
So how do you make that decision?
Before we get into the heart of the answer, I want to remind you why we’re creating an LLC in the first place.
We’re creating an LLC to put a fence between your business life and your personal life.
So if anything goes wrong in your business, your personal life isn’t impacted. And if anything goes wrong in your personal life, your business isn’t impacted.
So you’re creating this fence that puts a separation between the two of them.
When you put multiple brands, projects, or businesses in the same LLC, there is no fence between those businesses. The law treats your LLC and all of the brands or projects underneath it like they are one and the same.
And so the same 13 questions that I encourage you to go through when you decide if it’s time to become an LLC, are a great jumping-off point to decide if it’s okay for multiple brands or projects to be in the same LLC.
If you aren’t familiar with these questions, you can read them in this “Should I be an LLC” resource.
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What are some examples of when it’s a good and bad idea?
Some examples I’ve seen when it often makes sense is when you’ve got a high-end line and a more accessible line.
When I’m wearing my hat of “Kiff the lawyer” I have a lot of jewelry-based businesses as clients. And a lot of these clients have a high-end custom and bridal line that they do under their own name. And then they have an accessible production-style line that they have under a trade or business name.
And oftentimes it makes sense for us to put both of those in the same LLC. Because they’re okay with the high-end line impacting the production line and vice versa. And so in these cases often we put them in the same LLC.
An example I’ve seen when it doesn’t make sense is someone who has their own handmade business, with an Etsy shop, or a shop on their own website. And then they also teach handmade business owners how to run a successful shop. And there they might not want that coaching or teaching business to impact their handmade shop.
If something goes wrong in their handmade shop, they still want to make sure that their coaching business is protected. If anything goes wrong in their coaching business, they don’t want their handmade business to be impacted.
And so in those instances, it might make sense to put a fence between the two of them, so that one it doesn’t impact the other.
The bottom line is the same questions that we talked about before, are going to help us decide here.
Is it going to give me peace of mind to have a fence between the two businesses, projects, or brands?
And if so, then you might need them as more than one LLC.
If you don’t need that peace of mind, then it’s totally fine to throw them under the same exact LLC.
If you’re thinking of creating an LLC or you’ve got an LLC and you need to make sure you’re keeping it on the up and up, then check out my course. It walks you step-by-step through how to create your LLC and how to keep it legit once you’ve got it.