How To Form An Llc Holding Company
A series llc essentially allows a business to create a holding company structure without having to create separate llcs for each subsidiary.
How to form an llc holding company. While you can file your llc in your state of residence you also have the option of filing a delaware llc or nevada llc. To set up this business structure you must form two separate llcs within your state. As far as you run the holding and operating companies as different legal bodies the holding company won t be responsible for the debts of the operating company. Open a new bank account for the holding company. Form an initial investment strategy.
Starting a holding company as an llc or a corporation is a fairly painless task but you should get the help of an attorney to make sure you do it correctly. How to form your companies. You could also create an llc company for each business though this would require you to maintain separate accounting systems and divide up the expenses between each company. You should form an llc to limit your liability. If you need help with forming an llc holding company you can post your legal need on upcounsel s marketplace.
Generally speaking the structure of a holding company will look something like this. Choose separate names for the holding and operating llcs. A series llc offers the benefits of a traditional llc with one significant difference. Forming an llc is relatively simple. Create and file articles of organization for each llc with the appropriate state agency.
Determine exactly which types of investments you wish to hold. The member or members choose a name and then file articles of organization with their state of choice for a fee. The series llc was introduced in 1996 in the state of delaware. Fund the holding company and transfer any existing assets from the operating company to the holding company. All holding company and operating company assets must be kept separate to ensure your limited liability protection remains intact.
This structure is created at the time a business files its articles of organization and allows for the unlimited separation of business interests assets and operations into independent series. You have to make each a separate entity but you can be the agent for both. For more specific information on how a holding company is taxed be sure to consult a professional with any questions. You can start your own investment holding company by forming a strategy and filing the proper paperwork. To fully utilize asset protection an entity can form two llcs one operating company and one holding company.