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I believe what you are referring to is "series LLCs" where you create a "master" or "holding" LLC that then holds 100% interest in smaller LLCs. For example, you would set up Master LLC, with you as the sole member. Master LLC would then be the sole member of two or three other LLCs (the number is XXXXX and can be as small as 1), for example Sound Board LLC and Graphics LLC. By setting your business up this way, you are isolating the different parts of your business from one another, so that if Sound Board LLC is doing well, and Graphics LLC goes broke, you may continue to operate Sound Board LLC without any effect. Furthermore, the Master LLC will isolate you from liability with only 2 exceptions, (1) you are still liable for your own torts, meaning if someone were to get hurt at a gig by your actions, you would be liable (carry insurance to cover this under your LLC's name with you being named as an additionally insured or with "officers errors and ommissions insurance" - check with your insurance broker for appropriate coverage; and (2) you are liable for any contracts you co-sign for as being personally liable.
Many people do create an LLC or corporation to protect themselves from liability, it is a legitimate and reasonable way to conduct business. Creating a series LLC for a small business is not always economical, particularly for small businesses as it requires start up costs and management (recording fees etc.) for multiple entities (every LLC is its own legal entity), but the cost is not prohibitive and you may wish to do this if you believe your business ventures should be split up to protect them from one another.
(By way of example, most real estate investment firms will create series LLCs to own real property, with each different property owned by a different LLC, while a small business owner may only need one). The decision is up to you, to learn more about the costs involved in starting an LLC, visit the California Secretary of State's business portal: http://www.sos.ca.gov/business/be/
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William, You're answer was sufficient though the Question i think needs more detail. Let me elaborate, What is the benefit of having an L.L.C, in the instance of Sound Engineering. I put on Concerts, and do Recordings. What is the benefit of Having an L.L.C?
Is there a more inexpensive way to have a legal entity representing these different areas of business?
What is your recommendation given my career goals and areas of business?
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