If my wife and I are starting up 2 unrelated online businesses, is it wise to form a company to house both businesses or is it better to have them separate?

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If my wife and I are starting up 2 unrelated online businesses, is it wise to form a company to house both businesses or is it better to have them separate?

Is LLC the way to go? They are not related but will have a similar target market.

Asked on March 29, 2015 under Business Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Either an LLC or a subchapter S corporation will provide you the liability protection (against business liabiltiy and debts) that you want coupled with "pass through" tax treatment (no separate corporate tax). There is little to choose between among them, other than that an LLC generally has less formalities, papwerwork, and reporting requirements: it's probably the better choice unless you anticipate selling some of the company to others in the future, in which case there are some advantages to the sub-S corporation, since you can just sell some of your shares.

There are pros and cons to a single company or dual companies. A single company save you some duplicative fees and allows greater flexibility in using, applying, etc. funds. Two companies means each one is better protected or isolated from the other, can help keep the accounting straight, and would you let you sell one business entirely to others in a simpler way.


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