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 8 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.


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