Forums: Discussions for entrepreneurs and small business.

Hi, this is actually my first post, and I`m excited to jump in here and hopefully be a lot more involved. We are still working out a lot of details, but my husband and I have a number of different business ventures in the works and what we want to do is have one corporation name as the parent company of these other ventures which will each be DBAs out of the corporation with their own names. Does that make sense? Can we have one main business bank account that way? Does anyone have experience with this kind of thing? any advice/knowledge/thoughts you can throw our way would be GREAT!

thanks =)

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eight32,
Yes it can be done.
Here is what you need to do. You open your LLC or Corporation and then once you are ready to file for the DBA`s just do so.
You Can have them set up like this: My XYZ LLC
1. MY_DBA 1
2.MY DBA 2
3. MY DBA 3

The good thing about getting all the company`s under the Corporation is that "You can open a bank account for each of your DBA (the best way to do it) and then have a General Bank Account for the Corporation.




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Edgar Monroy
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I agree that it’s technically possible to have a C-Corporation act as a parent or holding company; however, depending on the organizational structure of your future divisions or subsidiaries, this might well subject your profits to double or even triple taxation.

C-Corps are separate tax entities and thus, their profits are subject to corporate income taxes.

Let’s assume that your holding company Generic Enterprises Inc. owns all or a controlling ownership interest in XY Divisions, LLC. Since LLCs are not recognized as separate tax entities, XY Division LLC’s profits will flow through to Generic Enterprises Inc. and become part of their taxable income/net profit, which is subject to corporate income tax.

If you or the shareholders of Generic Enterprises Inc. are to receive regular dividend payments, these cash distributions are then again considered to be capital gains from investment activities and thus subject to individual income tax.

It can even get worse if XY Division is structured as another C-Corp., which would essentially entail that their profits are taxed twice before increasing any cash reserves in Generic Enterprises Inc. that are eligible for dividend payments/cash distributions to shareholders.

You might be well advised to discuss your business model with a qualified CPA or financial advisor before making any decision as this can have a widespread impact on tax liabilities and thus the profitability of your venture.



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Jackson Steiner
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thank you one and all for your helpful responses! I hate the tax and legalities parts of this... it just doesn`t seem like it should be so complicated, you know =) anyway, we currently have an s-corp and were hoping to simply put a number of DBAs under it... it`s currently just my husband and I, and we wouldn`t plan to have many employees in the future, we just wanted a decent way to keep track of everything without making a bunch of different corporations. well, when I say "a bunch" I really only mean three for now - a graphic design business, a t-shirt company, and an inspirational art company. So they are not completely random, they`re kind of related. does that sound better than originally?

It's great to incorporate a holding company for tax issues when you have more than 3 business entities. You'll be amazed how you could maximize your taxation cuts.

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