Dear Salman,
An LLC can certainly be a holding company. An LLC can own corporations or
other LLCs. How to structure your businesses will depend in large part on
your desired tax treatment.
Corporations that are owned by an LLC are still taxed separately at
corporate income tax rates (and the parent LLC in such a case is treated as
a shareholder of the corporation).
LLCs are pass-through tax entities, so in the case of LLCs owned by
another (parent) LLC, the income of the subsidiary LLCs would pass through
to the parent LLC (and, in turn, would be taxed as income to the owner of
the parent LLC).
Chrissie
Mould Chrissie Mould has over a decade of experience in business
administration and startup business consulting. She has helped
launch companies in multiple industries and has managed
corporate administration and governance for public and private
companies. She is an incorporation specialist with
MyNewVenture.com LLC. The company provides low-cost
incorporation services to entrepreneurs and small businesses.
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