Is it best to umbrella one business under another?
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This section of the forum is for discussing the business and finance issues of the t-shirt industry. Which business structure to use (sole proprietor, LLC, S Corp, etc), how to handle billing, where to register your business and get the proper licensing, etc.
Is it best to umbrella one business under another?
Is it best to umbrella one business under another?
I'm just curious how I should structure my business. I basically want to run an internet business geared to a specific community, but don't want to sell myself short for future options geared at all people. I'm thinking about using a generic name like BW Graphic and Design for my license/tax id, while using my website (Headythreadies.com) as an offshoot. Is this a proper way to structure it?
Re: Is it best to umbrella one business under another?
I don't know what is the proper way, so maybe someone else can give you better information, but I can tell you that it is ONE way of doing it. You can set up an LLC or a Corp. (your umbrella business) and then DBA (Do Business As) your smaller entities. This saves you the hassle of doing an LLC or Corp every time you want to begin a new business venture (especially if you have a corp, because corps can get costly to set up and maintain). After you file DBA paperwork, you can even open bank accounts in the smaller business's names if you want.
Re: Is it best to umbrella one business under another?
Quote:
Originally Posted by BareApparel
I don't know what the if there is a proper way
I figured there have to be alot of different ways to do it. Probably should have never used the word proper. I really want to get as many opinions on the subject as I can. Thanks for the input.
Re: Is it best to umbrella one business under another?
Hi Barry, I think Bare Apparel has it covered with that answer. The only advantage to having a separate company structure is if you want to sell one entity at a later date, or for some obscure reason you want both businesses to be seen as independent.
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Re: Is it best to umbrella one business under another?
I am wondering the same thing, So I have my LLC and have some other companys under the LLC. If i just file for the DBA but not as a LLC, couldnt someone else just file for the LLC and then I wouldnt be able to use the name and anything I had built up with it?
Re: Is it best to umbrella one business under another?
Quote:
Originally Posted by jamaspea
I am wondering the same thing, So I have my LLC and have some other companys under the LLC. If i just file for the DBA but not as a LLC, couldnt someone else just file for the LLC and then I wouldnt be able to use the name and anything I had built up with it?
Good question... I didn't know, so I looked it up. I found an answer at:
In short, the answer is that DBA does not protect the name from use by others. To protect the DBA business name from use by others you would need to file a federal trademark.
Re: Is it best to umbrella one business under another?
Hey, thanks!
Filing an LLC or corp protects your name in the state within which you file. But a federal trademark makes the name yours, for your type of business, federally- across all the states. A federal trademark is an expensive and lengthy process, though, I believe.
Re: Is it best to umbrella one business under another?
i do this, but it was not on purpose. already had an established business for graphic design when i started the t-shirts. my accountant advised keeping them under the same roof until such time as the t-shirt part was making a good profit.
Re: Is it best to umbrella one business under another?
Also let's say you have multiple lines and one is a little racy and you get sued. Under an LLC with multiple DBA's all of your lines are subject to legal action. Some companies will go as far as starting multiple companies to handle every aspect of the business i.e. (production,shipping,accounting,advertising etc.). But until you make it big and actually have something to lose it will be more cost efficient and simpler to LLC it. Good luck.
Re: Is it best to umbrella one business under another?
Quote:
Originally Posted by BareApparel
I don't know what is the proper way, so maybe someone else can give you better information, but I can tell you that it is ONE way of doing it. You can set up an LLC or a Corp. (your umbrella business) and then DBA (Do Business As) your smaller entities. This saves you the hassle of doing an LLC or Corp every time you want to begin a new business venture (especially if you have a corp, because corps can get costly to set up and maintain). After you file DBA paperwork, you can even open bank accounts in the smaller business's names if you want.
Thats the way I'm doing it! By far the easiest way. A lot of business are set up like that.
Re: Is it best to umbrella one business under another?
Quote:
Gilberto: Also let's say you have multiple lines and one is a little racy and you get sued.
If it's a little racy you not likely to have a problem. Or are you saying "a little racy" is code for anything goes???
Bearing in mind each jurisdiction is likely to vary in relation to the next:
It could be said that an LLC is a better option as personal assets are not as exposed if things go wrong. Providing you don't need expensive equipment it should be fine. What if you do need expensive equipment? Being a new start will mean capital purchases on finance are limited as there is generally nothing to use as security. In many cases here people have been forced to use their homes as collateral for the purchase of equipment. In fact many franchisees are in that situation having used their homes as security to buy the franchise. And most people know a franchise is so close to being smoke and mirrors it's not funny. In Oz 7 out of 10 new businesses fail in the first 3 years!
Everyone should consider an LLC for the advantages it brings, but everyone also needs to read every rule and regulation which will affect you personally should you go down that road.
Trademarks are like patents. If you don't have one you could be turning your back on a future fortune!
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Last edited by BigSexyJohn; June 21st, 2008 at 12:30 AM.
Is it best to umbrella one business under another? 
