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We want to start several businesses. Is it better to set up a separate LLC for each business focus or to create a holding company with several subsidiaries?

Several colleagues and I have multiple business interests we want to pursue. Our various interests are mostly related to management, business consulting and investing in startups.
Nina Kaufman answered January 7, 2009
URL: http://www.entrepreneur.com/answer/221816
When you have several lines of business within one company, you run the risk that if one of the lines doesn't do well, it can take down the fortunes of the others. In addition, you may find that some of your colleagues want to be involved in only one or two of the lines of business; no all of them. In that case, it might make sense to start separate companies, as their ownership structure will differ.

Definitely speak to a local business attorney and accountant about your options (and whether an LLC as an entity is the right one for what you want to do). From a business perspective, however, tread carefully when trying to pursue multiple activities under one "roof," as it were. You want to be sure that all of the owners agree on the time, money and effort it will take to bring each one to fruition.

Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.