How many LLC can you have?

Legally, you can own unlimited LLCs in the U.S., each requiring its unique formation process and adherence to specific regulations. Managing multiple LLCs comes with complexities, including maintaining separate records and understanding fiduciary duties.

By Douglas Wade, Attorney

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Table of Contents

1. How many LLCs can you own at once?

2. Purchasing Membership Interest and Existing LLC

3. Establishing and Managing Multiple LLCs

4. Conflicts of Interest Associated with Owning Interest in Several LLCs

5. Is It a Good Idea to Own Several LLCs?

How many LLCs can you own at once?

In the United States, many business owners are interested in learning more about creating several LLC businesses. The number of LLCs that one person can form is unlimited, provided that the businesses are unique and separate.

For each LLC he or she forms, a business owner must adhere to the formation requirements. A separate Certificate of Organization must be filed for each LLC upon formation. Names for several LLCs must differ. All the LLCs may, however, use the same agent, accept legal documents, and have the same business location.

Purchasing Membership Interest and Existing LLC

The number of current LLCs in which a person may hold a membership interest is unrestricted by law. On the other hand, the majority of LLCs include an operating agreement that specifies how to obtain a membership stake. Thus, the amount of membership interests that an individual can get may be limited by operational agreements.

The minimum prerequisite for becoming a new member in the absence of an operational agreement is the current owners’ unanimous approval. It is possible for current members to demand that a new member provide the business cash or property. He might also pledge to contribute or render services in the future.

Certain LLCs limit a member’s eligibility for membership by preventing them from obtaining a stake in a rival LLC.

Establishing and Managing Multiple LLCs

A business owner must submit articles of organization to the Secretary of State and submit the filing fee in order to begin the LLC formation process.

An LLC has to have an operating agreement that outlines its management practices and the members’ and managers’ rights and obligations.

The owner has to complete the formation documents for each business and pay the filing cost in order to incorporate several LLCs. In certain states, the owner must additionally file an individual annual report for each entity and pay an annual fee. They must also keep separate financial and business records, as well as have separate bank accounts for each business.

Conflicts of Interest Associated with Owning Interest in Several LLCs

An LLC’s owners are required to adhere to a code of conduct that places fiduciary obligations on its members. Many LLCs demand that members uphold their loyalty by abstaining from actions that put the business in competition. When it comes to LLC business, the members must also refrain from self-dealing.

A member shall have personal liability for any loss or harm to the company resulting from his breach of duty. A person may be obligated to each LLC he acquires if they are all LLCs. When two businesses operate similarly, a member’s capacity to actively participate in either may be restricted by this duty of loyalty.

Is It a Good Idea to Own Several LLCs?

A business owner may have difficulties while owning more than one LLC since he may owe each one a duty of loyalty. While actively involved in the activities of another firm, the owner could find it difficult to refrain from breaking the rules of that other company.

For instance, let’s imagine a business owner has memberships in both a hotel and a company that supplies linens. To have his own bedding supply company deliver linens to the hotel, he wants to create a contract. The owner might not be able to accomplish this, though, as it would be against his obligations to the hotel for him to profit from such a deal.

As long as the owner is upfront about the issue and the other members don’t mind, some states permit these sorts of transactions. From state to state, an LLC member’s responsibilities take different forms.

Here are a few examples of responsibilities:

Obligation to be loyal
Obligation of trust
Obligation of care

One widespread misunderstanding that many entrepreneurs have is that being involved in multiple LLCs is illegal. For guidance on structuring multiple entities, consulting a business formation attorney is advisable. Nonetheless, neither state nor federal legislation restricts the quantity of LLCs an individual may possess. Despite this, fiduciary obligations may make it difficult or even impossible for a person to participate in each LLC actively.

Have a quick question? We answered nearly 2000 FAQs.

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