What to do if I currently operate an LLC providing driving services that is doing well and now I want to start another business booking bus charters for individuals and groups?

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What to do if I currently operate an LLC providing driving services that is doing well and now I want to start another business booking bus charters for individuals and groups?

Do I need another LLC or should I incorporate and then run both business under the INC?

Asked on June 18, 2013 under Business Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

There is no right answer: you can run both under the same LLC; or under a single corporation; or under seperate LLCs or corporations. As some things to consider:

1) There is very little to chose between a pass-through LLC and a subchapter-S corporation: they shield you from liability in the same way, and they have the same tax consequences. A corporation is easier to sell interests in later, if you want to bring in other investors; an LLC has easier reporting and administrative consequences; but either will do the job.

2) Having both businesses under the same structure will increase flexibility (e.g. you can move money and staff from one to the other) and reduce administrative and accounting overhead by some small degree. On the hand, it increases your vulnerabiltiy, since a major debt or obligation of, or lawsuit against, one business will also affect the assets of the other, whereas if you have them under separate LLCs or corporations, one should not be affected by the debts of the other. Also, while it's lower overhead to only have one set of "books" to keep, it's easier and simpler cognitively to keep the businesses distinct--you can tell at a glance how each is doing, without having its performance obscured by the other.

Personally, I prefer the safety and simplicity of having a separate LLC or corporation for each business over the flexibility and overhead savings of combining them, but that's a personal preference.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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