By | Nellie Akalp | www.entrepreneur.com
Most entrepreneurs I know are driven, curious and never content with the status quo. These traits are probably why so many of them dabble in multiple ventures. A restaurateur may open a wine shop; a personal trainer may launch a line of fitness apparel. There’s always a new opportunity out there somewhere, and diversifying your income can be a sound strategy.
If you are running multiple businesses or thinking about starting a second one, you may be wondering what is the best approach for legally structuring each business: should you have separate corporations/LLCs for each one or a big umbrella company to hold them all? Are there any limits to the number of companies one person can form?
Generally speaking, there are three different ways to structure multiple businesses. There are advantages and disadvantages for each approach — and the best structure will depend on your personal situation. Here’s some general advice to consider, and you can always discuss your specific needs and details with a CPA or attorney.
1. Create individual corporations/LLCs.
First, there’s no limit to how many corporations or LLCs one person can form. Many entrepreneurs opt to file a new LLC or corporation for each of their startup ventures. For example, you can form an LLC for your landscaping business and another LLC for the golf course you purchased.