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CalAttorney2, Attorney
Category: Business Law
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Experience:  I am a businesses law attorney, with experience advising and representing owners and investors.
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Hello, I am a Sound Engineer, doing Freelance Recording and

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Hello, I am a Sound Engineer, doing Freelance Recording and Concert Sound Engineering and I was recommended by my peers to Great an L.L.C as a platform to conduct my business affairs AS an individual. Okay, So My question is, I also want to Make and Sell Musical instruments, Artwork, and have a Developing Video Game to create and My question is
Is it appropriate and smart to create one Company, for myself as an Individual Umbrella Company, That can conduct all these different areas of Business?

Attorney William B. :

Dear Customer, thank you for choosing Just Answer. I would like to assist you today.

Attorney William B. :

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.

Attorney William B. :

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:

Attorney William B. :

I hope that my answer was of assistance to you. My goal is to provide you with excellent service – if you feel you have gotten anything less, please reply back, I am happy to address follow-up questions. Please remember to rate my service once you have all the information you need. Thank you for your business!

Customer: replied 3 years ago.

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?


Dear Customer,

The benefits of an LLC are that it shields the owner of individual liability for debts of the business. This means that if the LLC enters into a contract for goods or services, and later is unable to pay, the provider is only able to pursue assets of the LLC, and cannot pursue individual assets of the owner or member.

The owner or member remains personally liable for their own torts (if you are driving the company vehicle and strike a pedestrian, both the LLC and the owner/driver are liable), or if the owner signs as a guarantor or co-signer on a loan or obligation, both are liable. But absent these circumstances, the owner is protected from liability.

Some businesses use multiple entities such as LLCs or Corporations to shield one business from another, for example if the recording business goes out, but a production business is still viable, the two are separate entities and the recording business going bust will not affect the production business.

I cannot give you a recommendation regarding your own personal situation or business. We are prohibited from practicing law through this forum, and I do not have enough information to give you a viable legal opinion, but I do hope that an explanation of why businesses for limited liability companies and the value of doing so is helpful in making your own decision to go forward. If you do decide to create separate entities you can do so one at a time as you grow your company.
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