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I am in the process of forming a LLC so that I may sell a product with the protection that an LLC affords. I am the sole member of said LLC.

I now have two more completely unrelated (to the LLC, but related to one another) ventures that I'd like to explore but I don't want to pay California for two more LLCs. As I understand it, I can create two DBAs that pass through to the LLC. Fine, that's much cheaper and I still have the protection of the LLC.

However, if the product is successful, I don't want that link to remain. I would like to then take one of the DBAs and form a LLC and have the remaining DBA pass through to the new LLC. Does this make sense? For example...

MySodaCompany (LLC) <-- John's Maintenance (DBA) <-- John's Irrigation Service (DBA)  

MySodaCompany (LLC)      
John's Maintenance (LLC) <-- John's Irrigation Service (DBA)

This all assumes that what I've been told/read is correct. Please set me straight!

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1 Answer

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I think you meant "old LLC", but Yes what you suggest is correct. Certainly any company (LLC) can develop more than one product. It's not clear that you need a DBA for every product you develop. After all, products don't need DBAs, only unofficial businesses do. And, the DBA doesn't give you any legal protection. This all depends a little on what kind of business you're in, but do you need to have all these DBAs? Why not just offer them using the original LLC directly, to start.

You can transfer in some way, the new product to a new LLC, but that may also involve tax consequences and some additional accounting, especially if you wait too long.

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Thanks! My reasoning for multiple DBAs is so that John's Irrigation Service is not working from the name MySodaCompany. Totally unrelated businesses. These names are fictitious but that's how totally unrelated my product and service are. – Jason Apr 20 '12 at 19:48

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