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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10628
Experience:  30 years of corporate, litigation and international law
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I have an LLC (LLC1) thru which I run 3 hair salons.

Customer Question

I have an LLC (LLC1) thru which I run 3 hair salons. For the 4th salon, on advice from various sources, I've created a second LLC (LLC2) whose sole member is LLC1. My question is what does this do to things like paying bills? Can LLC1 pay all of LLC2's
bills? Is there any special accounting treatment required? Is there anything LLC2 MUST handle and pay out of their account? Who should employ the employees? Does LLC2 require a separate Worker's comp policy if it employs them OR can they all be covered by
LLC1? Any help will be appreciated. Thanks.
Submitted: 2 years ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 2 years ago.
Hello, my name is***** will try to help you. Please remember I just report or interpret the law, so the outcome may not be what you hoped for. I assume the purpose of forming LLC2 was to isoloate any losses in the fourth salon from the first three. To keep this protection, you need to try to keep their bills and operations separate. However, for things like workers compensation, you shoulld be able to get a single policy that covers both LLCs even though employees only work in one LLC or the other. The cost of the single policy would be allocated between the two LLCs. With respect to bills, each LLC should pay its own bills. Things that are used in all the salons, LLC1 can provide the item and bill LLC2 for its proportionate share of the item. The accounting needs to be separate forthe two LLCs because the profits or losses generateed by LLC2 will be passed through to LLC as its sole member. If I have answered all your questions, please positively rate my answer as that is how I receive credit. If you have more questions, please let me know. If my answer was particularly helpful you can pay a bonus.

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