I want to operate several different businesses with my 2 business partners. What is the best way to set up our separate businesses?
I have 2 business partners and we want to do several different businesses. Do we create 1 LLC as partners, then apply for each business under the LLC's name as the owner?
Example: We have A,B,C, equal partners who want to do retail123 as a business, life coaching234 as a business, and planner235 as another business. Do we form a parent company and then set up each company as an individual company? Or skip the parent company and do each business as a partnership?
I'm trying to make it easy for us small business wise. If and when we do get sued, we don't want it to affect the other companies or our personal finances.
While an LLC may not be able to own other companies, one SUB-S or C Corp can own any number of businesses
Do you want to operate the same Businesses between you all, if so, this would be set up normally on a share basis between the partners which would be decided between you all. The deal may be structured for example as A 50/50 basis between two directors. The best way if there are more than two businesses is to get some advice for tax purposes also and there will be lots of other things to take into consideration such as VAT registered or not. An accountant will be able to offer you the advice you will need and whether you want to set up an individual business for each one or a group of businesses under an umbrella which can be a trading company, it can be quite complicated so its best to get professional advice.
Each business should be set up as a separate LLC. Each LLC should have an operating agreement that spells out the responsibilities of each partner, their roles, how decisions are made, how each of the partners are compensated, and to what extent each partner shares the profits. Each LLC should have a Buy/Sell agreement that defines how your divorce will be handled. For example, If one partner wants out, is the entire business sold and each partner receives one third of the proceeds? Do the remaining two partners buy out the third? At what price? How is the price determined? Each LLC should be started with these documents in place. Consult a business attorney to draft the set for one of the LLCs, then use that set as a template for the remaining LLCs.