Create Holding Company

[Jose Castillo]

I'm converting my already aged LLC into my Holding company and then creating a subsidiary LLC owned by my holding company.

What's the best way to set this up in a manner that allows me to pass money through my subsidiary up to my holding company?

What agreements would I need?

When money is made from the subsidiary business Do i just deposit money into the subsidiary account, and then write the holding company a check of the full amount?

[Aaron W.]

@Jose Castillo My partner and I do this right now in our partnership. We each have our own personal LLCs. The personal LLCs own the partnership LLC (holding company). The partnership LLC owns all the subsidiary LLCs in each market we invest in. The subsidiary LLCs own the properties.

When you establish the subsidiary LLC, ensure you register it using your holding LLC as the owner and don't use your name. In this way, everything flows up through the LLCs.

We operate each subsidiary LLC as a separate entity and establish its own bank account. For accounting purposes, your CPA will thank you as you will be able to itemize and track income and expenses for each LLC separately.

Hopefully, this is helpful.

Have a great day!