This article describes the possibility and drawbacks of running multiple businesses under the umbrella of one LLC.
You can run any number of businesses in one LLC and those businesses can be substantially different in nature. There are multiple drawbacks to this approach. The article describes the most obvious drawback which is that each business’s income and assets will be subject to the claims and liabilities derived from the operations of the other business(es).
Another major drawback, not discussed by the article, is based in tax: running multiple businesses under one LLC creates a bookkeeping and accounting mess. The thought alone of maintaining different employees and different payrolls in one entity is daunting from a reporting perspective.
Finally, and to me most importantly, failure to keep the proper amount of separation between activities can also lead to very unintended and unexpected tax consequences upon disposition of property, LLC property is owned by the LLC as an entity, as a result all activities taking place within the LLC can have an effect on the character of the property as a capital or non capital asset depending the complexities of the tax law that would apply to decide that issue based on the circumstances.
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Five Stone Tax Advisers has years of experience negotiating directly with the IRS to get the best possible outcome for you. Our International Tax Advisory and Compliance unit has a team of tax attorneys, certified public accountants and enrolled agents that form a single sourced point of contact that will provide services for all the legal, compliance and financial reconstruction aspects of offshore account cases.