Business Legal Structure and Tax Implications

One of the important questions when starting a business is finding the right legal structure for that business — and understanding the tax implications of that legal structure.

Here is one question from one of our readers sent via our Consult Your Guides service:

Q. I have three small business operating as corporations and my objective is to find the best protection (limit liability) and gain tax advantage. My question, firstly is whether I can open up a parent holding company, a LLC, (can a holding company be an LLC?) which will then own the three corporations.

Secondly, should I open that parent LLC and make each of the three corporations LLCs also or do I really need to have a parent LLC or can I just convert the three corporations into three LLCs without opening a new umberella parent LLC.

Thirdly, one of the three corporations can convert into an LLC and own the other two. Again, the other two can remain as corporations or become LLCs. I own all three companies and I intend to be the boss in whatever direction I choose to go into with the structure change. Please advise … Salman, Florida

Read the response of our incorporation expert Chrissie Mould “Objective: Limiting Liability and Gain Tax Advantage For Corporations” . You can also check out other questions on business legal structure, tax, licenses and other regulatory requirements.