Great Site Tax Guru's!!

Okay I really don't know where to begin. I'm in the process of starting a new retail business in Washington.

I'm trying to decide whether or not it would be a good idea to use my previous LLC that I filed back in 2005 in which I never conducted any business since or completely file a new entity to start up this new business.

My question is, Would it be a disadvantage to use a LLC that was filed back in 2005 vs. something that is filed more recent?

At first I was actually thinking of registering a new trade name under the current LLC but I wasn't sure if that was permitted.

Another question that I have is:
Pior to staring this new business of mine's. My plan back in 2005 was to have an LLC filed so when I was ready to do business it would save me some time.

At first, my goal was to have a few different businesses under the same LLC. Then I started to wonder if that was even possible. I wasn't sure how I would file the taxes if all the trade names shared the same UBI number.

For instance, I have an LLC formed as "Endless Investments, LLC" Now I want to open a retail dollar store at one location and open grocery store at another location using different trade name but under the same LLC. Would that even be possible?

Thanks,
Rick

Dear Rick,

Firstly thanks for your positive comments!

To answer your question from a tax point of view, you can do all the things that you want to do with your existing LLC's. The advantage to you of using your existing LLC is that you would save an additional cost of $500 for incorporating a new entity as well as don't forget you will only have to file a Single LLC return instead of 2 returns. Again, you will save Washington State (or DC) annual filing fees for 1 entity. Remember you have to pay a minimum filing fee for every entity that you intend to file!

So, the advantages of using the old entity are usually financial in nature and stem from the fact that you would save tax return fees and annual filing fees for 1 entity.

I dont see any disadvantage as such, because if you can always use a DBA to describe your business to customers and not the actual LLC name, and that is permitted!

Now for your second concern! Should you use a different LLC for a different business altogether. Here you have an entirely new physical location. Clearly,this is different situation altogether from the earlier discussion. In my CPA practice of over 20 years, i have seen that businessman have been advised to form a new entity to conduct a new business at a different location.

Here the business risks and liability issues override the tax filing savings etc as described above. The usual practice is to form another LLC to conduct the other business. Once again, this simply means that you want to completely separate the accounting and tax activities of each entity for reporting purposes. This is will definitely be more expensive than consolidating the 2 businesses into one LLC activity.

But, my preference is to separate the businesses into 2 separate LLC's.

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