Here, the best advice is to put your ‘eggs’ into separate baskets. It’s another vital protective strategy. If you use one corporation or LLC to operate one business, then use two separate entities to operate two businesses and so forth. You want to separately incorporate every business. If one fails or is sued, it won’t then endanger the others. Multi-corporations (or LLCs) limit your losses. You can find corporate graveyards littered with once-thriving companies that vanished because all their ‘eggs’ were in one corporate basket. Even the smartest entrepreneurs make mistakes and become saddled with losers. Your goal is to isolate your potential losers from your present or future winners. The only way to achieve this is to compartmentalize each venture with a separate corporation or LLC. You can then more easily and safely shed your losers and build on your winners. Operating your expanding business through one entity will give you the advantage of operational simplicity, but we think protection is far more important – particularly when you’re small, growing and vulnerable. You can own multi-corporations or LLCs through one holding company, LLC or limited partnership. Each operating corporation or LLC would be a subsidiary. Or if you operate through LLCs, check the Series LLC because each cell within the Series can operate autonomously.
How should someone organize their expanding business?