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Is there a benefit to having a corporation own multiple

LLCs? Or is one corporation...
Is there a benefit to having a corporation own multiple LLCs? Or is one corporation doing multiple businesses a better way?
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Answered in 2 minutes by:
10/24/2017
Roy Hadavi
Category: Business Law
Satisfied Customers: 1,280
Experience: Attorney at Law Offices of Rosenstein & Associates
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Hi. My name is ***** ***** I am a licensed attorney with extensive business formation experience. I would be happy to provide assistance. Please keep in mind that our conversation does not include an attorney-client relationship and this is for general information purposes only.

Answer: There is absolutely a benefit. If you separate each business into a separate legal entity (corporation or LLC), you then separate the legal liability for that business from the other business. There is a prominent case taught in law school where a taxi company had a separate corporation for each taxi cab (Taxi Cab Corporation 1 through 10). This ensured that if there was an accident with taxi cab 1, that the other 9 cabs were protected from the liability.

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Customer reply replied 7 months ago
Perfect. So from a legal stand point each will be protected. But is there a benefit to having a holding company owning all the LLCs under one umbrella?

Yes, it let's you centralize your ownership. Also, if you want to have investors for the entire enterprise, you can also do so this way.

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Customer reply replied 7 months ago
I see. From a taxation standpoint, what is the consequence of doing so?

That is the one downside to this proposition. You will have to file multiple tax returns for each separate legal entity. Although, the benefits outweigh the detriminents.

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Customer reply replied 7 months ago
Is there a tax saving by doing this structure?

No, there are no tax deductions or savings from this structure.

Roy Hadavi
Category: Business Law
Satisfied Customers: 1,280
Experience: Attorney at Law Offices of Rosenstein & Associates
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Customer reply replied 7 months ago
Got it. Thank you

You're very welcome.
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