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Yes, an LLC can own another LLC, which is a common way to structure ownership and control of multiple businesses under a single entity.
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Last Updated: March 23, 2026
It’s not uncommon for an owner of a limited liability company (LLC) to consider setting up subsidiary companies for different lines of their business. But is it possible to do that with an LLC? Can one LLC own another? And is it a good idea?
This guide walks through the basics of how and why an LLC might come to own another LLC.
An LLC owning another LLC is perfectly legal. The LLC’s owner (referred to as a “member” in an LLC) can be one or more individuals or business entities like C corporations or other LLCs. It’s even possible to form an LLC where the only member is another LLC.
It’s not uncommon for a business owner to have multiple lines of business. The owner mitigates some risks by forming a parent LLC and subsidiaries (other LLCs that it owns). If one line of business fails as a subsidiary, it won’t heavily impact the other businesses. If a parent company owns at least 80% of its subsidiaries, it can offset one business line’s profits against another’s losses.
Any company with distinct types of businesses or business ventures with different risk levels could consider using an LLC to own others. However, states charge filing fees, and each LLC requires its own paperwork, including tax forms. Additionally, if the parent company is sued, all assets are at risk, including any LLCs owned by the parent company.
While it’s true that one LLC can simply own another outright, it’s much more common to specifically designate the parent company in some way. One LLC can own another in three primary ways: outright ownership, LLC holding companies, and series LLCs.
The simplest way for an LLC to own another LLC is through outright ownership in a parent-subsidiary LLC structure. Because the laws are so flexible about who or what can own an LLC, they also include business entities, like other LLCs, to be owners.
A holding company, or parent LLC’s, purpose is to own other companies. With the holding company method, an owner can make separate LLCs for each line of business (see the subsidiaries definition guide for more information) and own them all under a holding company (see the holding company definition). Holding companies don’t actively manage their subsidiaries’ daily operations.
A series LLC is the formation of a parent company with designated separate series entries under the parent. Although similar to a holding company, a series LLC doesn’t require each entry to file documents separately. When someone starts a series LLC, the LLC must state in its Articles of Organization that it is allowed to form a series. However, series LLCs are only allowed in certain states:
Please note that this list is subject to change; since the series LLC is a newer structure, many jurisdictions are periodically adding (or may even remove) series LLC laws in their statutes. California is unique because the state doesn’t allow for the formation of new series LLCs, but series LLCs from other states can get authority to conduct business there (qualify as a foreign LLC). Interested business owners should verify their state’s specific guidance before proceeding.
There are a few benefits to a series LLC. The main benefit is that each LLC in the series LLC is shielded from the liabilities of the other LLCs in the series. This can especially benefit companies like real estate businesses that own more than one property and want to protect each property from the liabilities of the others.
Business owners of a series LLC only need to pay the state fees for one business, so they save money by avoiding those additional costs. But each LLC in the series must still be treated as a separate company with its own name, financial records and accounting, and business bank account.
A DBA (or doing business as) name is not a separate company. It’s a name that a company can do business as that differs from the business’s legal name. Conversely, subsidiary LLCs are completely different entities.
DBA names are much simpler to establish than subsidiary LLCs. Depending on the state, it could be as easy as filing a name and paying an initial filing fee. DBAs require very little paperwork to start up, change the name of, or shut down the line of business. However, because DBAs aren’t separate legal entities, all obligations and lawsuits directly affect the parent company’s personal assets.
Subsidiary LLCs, on the other hand, are separate entities, so they require much more paperwork and administrative costs than DBAs. The owner would need to file for distinct Employer Identification Numbers, separate operating agreements, and other essential information. However, this distinction has many advantages, like sharing ownership with another company and liability protection from lawsuits filed against the subsidiaries.
The number of DBAs an LLC can have depends on individual state laws. For example, an LLC can have as many DBAs as it wishes in California.
LLCs have pass-through taxation, meaning they have a few options for federal tax purposes. They can be taxed as a disregarded entity (like sole proprietorships and partnerships are), an S corporation, or a C corporation. C corporations must pay corporate income tax on profits, which are taxed a second time when distributed to shareholders.
S corporation status lets an LLC avoid double taxation by only being taxed at the individual level, but other LLCs can’t own S corporation LLCs. Series LLCs are treated as single entities for federal tax purposes, so the business only files one federal tax return. At the state level, the legal requirements for tax documents vary.
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Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
Yes, it is possible to run two businesses under one LLC.
Yes, one LLC can invest in another LLC with a loan or equity investment.
It’s possible to set up multiple businesses under one LLC by creating multiple DBAs, starting a holding company, or making a series LLC if available in the state.
Although it depends on the company’s needs, having multiple businesses under one LLC may not be better. If one business gets into legal or financial trouble, it will affect the entire LLC.
No, LLCs can’t own S corporations.
Yes, an LLC can own a C corporation.
Can an LLC hold a minority ownership stake in another LLC?
Yes, an LLC can hold a minority ownership stake by becoming a non-controlling “member” (owner) of another LLC. This is common for investments, joint ventures, or strategic partnerships.
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