Legal Question in Business Law in Texas
I plan on establishing an LLC to operate as a holding entity for my smaller businesses (operating entities.) I don't plan on having any of my operating entities as LLC's , but to just channel the liability to the parent holding company. Is this a format that fits best? I don't have enough funds to establish each of my businesses as LLC's thus the reason for the parent LLC. What are the pro's and con's to this format? If I do pursue this format, how do I file the operating entities? Do I file DBA's in the appropriate county? I don't know the legal, financially soluble way to file these operating businesses.
2 Answers from Attorneys
The cost of creating a parent LLC is the same cost as turning your current business into an LLC. If you can't turn both into LLC's (or S Corps) then turn your current business into an LLC. You will still be shielded from liability if you operate it correctly.
In lieu of a parent LLC and subsidiary LLCs, you may wish to consider a series LLC. This would allow each business (a series) to have separate assets and liabilities from every other series (business) that you own.
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