Can I Own an LLC & Open Another Business Under a Different Name?

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A limited liability company can wear more than one hat. If you and your partners set up a limousine business or a dress shop as an LLC, for instance, it's legal for the company to branch out into other fields. If you wish to do this under a different name, that's also legal, though you'll have to register the name with the government first.

LLCs

  • It's much simpler to set up a limited liability company than a corporation, but an LLC provides similar protection for your assets. If the company can't pay its debts, owners usually aren't liable for the losses. The LLC functions like a partnership or sole proprietorship: Instead of paying taxes itself, the company passes income through to you to report on your personal tax return. Businesses as well as individuals can become partners or sole owners of an LLC, and the LLC can become a partner in another company.

Doing Business As

  • When you file the paperwork to create an LLC, you'll have to register the company name, for example, "Titanium Paperclip Manufacturing LLC." If you decide you'd like a different name on your stores and letterhead, such as "Indestructible Paperclips," most states will require you to register a "doing business as" statement identifying the new name. This makes it harder to hide responsibility if someone has a complaint or legal issue she wants to take up with the owners.

Multiple Names

  • If you decide that Indestructible Paperclips could make bigger profits by selling staplers as well, you can go ahead and do it without changing the name. If you decide that expanding might hurt the Indestructible Paperclips brand, you can set up that part of the business under a different DBA; the further away you move from your current specialty, the more reason you have to get a second DBA. You could also set up the business as a new LLC with Titanium Paperclips as the owner.

Considerations

  • Having your new DBA become a separate company owned by your LLC will give you an added layer of liability protection, and possibly some tax benefits. On the other hand, it adds a lot more legal complication. Some states levy a tax on LLCs, so creating a new company would cost you more than have one LLC with multiple DBAs. When choosing the name for the new branch, you'll have to avoid trademark infringement, and you'll also have to comply with your state's law on fictitious business names.

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