I need help deciding on the best business structure for my work. Can you help?

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Customer: I need help deciding on the best business structure for my work. Can you help?
Answered by KLAW in 2 mins 1 year ago
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KLAW
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KLAW, Expert

Hello. I am here to assist you with your legal issue.   Thank you for using Just Answer, and being a valued customer.

I am a legal expert  and an attorney with 25 years of experience, who will assist you today. JustAnswer provides expert opinions on general legal issues.  No Attorney-client relationship or privilege is formed by speaking to an expert on this site, the answers are for general information, nor does it replace consulting with a local attorney.

By continuing, you confirm that you understand and agree to these terms. I will need a few minutes to review and to work on your answer

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Please give me more specific details about your questions. What state are you referencing

Customer
I’m in Texas. I am an engineer and I do design consulting. I create models using CAD software and I also have a small shop where I use a laser cutter and a 3D printer & other small machining equipment. I also have an online store where I sell some of my own artwork that I have created using CAD software and the laser machine. The artwork started as a creative outlet and is becoming somewhat profitable (expecting $80-100k in sales this year) I’m wondering how to best set things up moving forward. Should I create one LLC for both of them? Or separate them apart from each other if it makes a difference. I can see how the expenses might be confusing under one since they are in different industries.
Customer
For example I may have photo shoots as a business expense for my artwork. This isn’t necessarily a typical business expense for an engineer.
Customer
I just also really dont want to have to have two business accounts for like everything (Amazon accounts tax IDs etc)
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KLAW, Expert

To combine business’ under one LLC  is convenient, but runs liability risks. Separating the businesses under individual LLC’s, ensures that the assets, debts, and liabilities of each LLC are completely disconnected and shielded from one another in the event of any possible litigation.

This framework often consists of one parent LLC at the top of the hierarchy—let’s call it ABC Holding Company, LLC. People then typically create multiple sibling LLCs.

When you run two separate businesses under two separate LLCs, the assets and income of each individual company is also protected from any liability risk which might affect the other company.

Since your businesses are distinct, engineer and online store, and you don’t want the business’ to be liable for each other, you should separate the LLC’s and business accounts.

It may be tempting to start up that second business under the umbrella of your current LLC, but it often isn't a wise business move.

While operating both businesses under one LLC may offer you some shortcuts, such as simpler business administration banking, and only one annual filing fee, in the long run, these shortcuts are probably not worth the increase in potential risk.

I hope this helps

Customer
It does help! It’s what I was thinking… but didn’t want to hear haha
Customer
Thanks for steering me in the right direction
Customer
At least providing me the info that is valuable to me^
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KLAW, Expert

It is was  a pleasure assisting you with your  question. Stay safe, If you have any questions please don’t hesitate to ask. If not please don’t forget to rate the question with stars on the top or bottom of your screen.

Please request me Klaw, if you have any additional questions.

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