Is it OK for me to have one LLC do services and charge for it for another LLC where I am sole member of both?

For example if one focuses on residential rental/leasing/property management and the other does construction/remodeling.

Asked on November 26, 2018 under Business Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

It is 100% legal and not uncommon: for example, many of the landlords I work with (I am a landlord-tenant attorney) have one LLC which owns the property, another which provides property management services, for example.
One thing to be careful of: keep the LLCs strictly separate. Separate bank accounts; each pays their own bills; no money transfers between them EXCEPT to the extent it is provably payment for services provided; document any work done by one for the other and actually invoice for it; etc. Long story short, and without getting into the weeds, if you don't respect the independent existence of an LLC, you can lose the liability protection. So if you "comingle" the funds of the LLCs in some way, if one is sued, both could be liable.


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