Can we have a combo LLC company?

Question

Hello,

I just wanted to know if to know if it's possible to own an LLC that offers a combination of services residential ( rentals) as well as consulting such as software consulting service so that everything is under one umbrella.

Thanks

Ryan Daigle · Answer

@Kumar Gaurav you CAN do that, but ask any lawyer (not me) and they'll probably try and dissuade you. The value of having different lines of business contained within different LLCs is that if one of your software consulting clients sues you, they can't access your real estate assets (and vice versa). If they're all bundled in one LLC then any liability incurred by one line of business exposes all of them to forfeiture.

So... I'd recommend against it.

Kumar Gaurav · Answer

@Ryan Daigle

Thank you, it makes lot of sense each business in its own sandbox.

Dave Spooner · Answer

@Kumar Gaurav You absolutely can! The main purpose behind an LLC is to separate assets to limit liability (hence the name). For example, if you own 3 properties and also run your consulting business through one LLC and someone sues your consulting business, they could technically go after your 3 properties as well (depending on the judgement on the case).

Some landlords put each of their properties in different LLCs to isolate them and provide maximum protection. It's probably overkill, but you also likely don't want to have a huge number of properties and assets under one LLC. Just find the right balance of protection you're comfortable with.

Steve Vaughan · Answer

I wouldn't combine enterprises with different types of income.  Rentals are passive income.  The asset earns the money.

Consulting earns ordinary active self-employment income.  You earn the money. Completely different.

I hold commercial properties in LLCs. One asset type and purpose. One type of income.

Mgt, consulting, lending, wholesaling, trade work, etc are in a different entity type altogether like an s-corp. The s-corp owns little and certainly not real property.

CAN you own both under the same 'umbrella'?  Sure.  Should you is the question.

Kumar Gaurav · Answer

@Dave Spooner

Thank you , this explanation was very helpful.

Can we have a combo LLC company?

Most Popular Reply