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Old 14th August 2007, 06:23 PM   #1
ckeck
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Join Date: Aug 2007
Posts: 1
Default Parent Company? DBA? Help!

I have a situation...I used to own a small computer consulting business and I had to close up shop a few years ago for multiple reasons (non financial).

Since then I have started a new company dealing with some real estate transactions I have done. I have spent a lot of money forming this company into an LLC and a major amount of time investment building this companies credit history, etc...

I just recently "re-opened" my computer consulting business and was thinking about setting this company up as an "owned" company of company X (my new business entity). I would like to rely on this as a parent company to help when seeking credit for my old computer company.

How could I achieve this?
Any advantages/disadvantages?
Any tax issues I would need to be aware of?

Also...would l just be able to set up a DBA between the two companies?

Thanks for all the help...I'm deep in uncharted territory

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Old 16th August 2007, 09:35 AM   #2
PiperTax
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Join Date: Jul 2007
Posts: 13
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I'm not a lawyer, but to the best of my knowledge, you could have your LLC file a DBA for your computer business.

Assuming you're the sole owner of each of them, this won't be much different for tax purposes (Federal at least) than if you simply had an LLC for each. They'll both simply be reported as Schedule C income (or loss if that's the case, but let's hope not :-).

One thing to consider: I don't know if your computer consulting business could potentially have any liability issues in terms of if a service you provide ends up going badly. If so, the plaintiff would be able to come after your established LLC's assets, not just the assets related to the computer business.

That said, it's a total non-issue if you're the only person providing the services. If you are (and something were to go wrong), the plaintiff would be able to come after you personally regardless of how you decide to set it up.

Whichever way you decide to go, best of luck to you!

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