How To Form An Llc Holding Company

The series llc was introduced in 1996 in the state of delaware.

How to form an llc holding company. Open a new bank account for the holding company. Fund the holding company and transfer any existing assets from the operating company to the holding company. As far as you run the holding and operating companies as different legal bodies the holding company won t be responsible for the debts of the operating company. While you can file your llc in your state of residence you also have the option of filing a delaware llc or nevada llc. How to form your companies.

You have to make each a separate entity but you can be the agent for both. Starting a holding company as an llc or a corporation is a fairly painless task but you should get the help of an attorney to make sure you do it correctly. Choose separate names for the holding and operating llcs. Generally speaking the structure of a holding company will look something like this. You could also create an llc company for each business though this would require you to maintain separate accounting systems and divide up the expenses between each company.

This structure is created at the time a business files its articles of organization and allows for the unlimited separation of business interests assets and operations into independent series. The member or members choose a name and then file articles of organization with their state of choice for a fee. To set up this business structure you must form two separate llcs within your state. To fully utilize asset protection an entity can form two llcs one operating company and one holding company. As you set up your holding company you will need to find a board of directors to manage the holding company and oversee the subsidiaries.

For more specific information on how a holding company is taxed be sure to consult a professional with any questions. A series llc can establish under that umbrella an unlimited number of self contained cells. The holding company or llc is at the top and individual subsidiaries exist underneath it. Determine exactly which types of investments you wish to hold. All holding company and operating company assets must be kept separate to ensure your limited liability protection remains intact.

Select a registered agent for each llc. A series llc essentially allows a business to create a holding company structure without having to create separate llcs for each subsidiary. Forming an llc is relatively simple. Form an initial investment strategy. You can start your own investment holding company by forming a strategy and filing the proper paperwork.