Forming multiple companies

[fronty]

I want to start 3 very small businesses at the same time. Two of them are in related fields. What is the best way to set it up?

The three companies are:
-HVAC (Heating, Ventilation, and air conditioning)
-Home services (minor home repair work similar to handyman)
-Event company


I will have to use common resources. This will include office, vehicles, possibly employees, etc.


Should I just form a single LLC and have three DBA under it?

Some of my concerns will be insurance coverage (for vehicles, workers comp, liability), the amount of accounting, and liability.

[Freelancier]

Looking at them, I'd probably do two companies: one for everything related to going into the home and fixing things and the other for events. My reasoning is exactly one of your concerns: insurance. The HVAC and handyman companies would be similarly insured and have similar risk profiles, so why pay twice for that? The event company appears to be the outlier, so I'd keep that one as a separate company. And I'd get both of them their own LLCs, just so that their liability is shielded from each other as well as from you.

But that's me. You may want to talk with a lawyer as well as your insurance agent and accountant about this, since they'll have a better handle on your specific situation than we will.

[tallen]

I agree, two separate entities, one that covers the mechanical and home services and a separate entity for the events. In terms of the shared resources, have the various resources owned by one or the other entity but set up lease/operating agreements between the two entities that describes the sharing relationship or services provided (but check with your insurer, especially as it pertains to the vehicles). For example, I am imagining the vehicles being owned by the mechanical/home services company, loaned to the events company, but the office employees being employees of the events company, providing services to the mechanical company. But if you've got a guy who helps fit ductwork for the mechanical company, but also does rigging and stage work for the event company (just an example), probably best to treat him as separately employed by each company (two of all the paperwork, two time sheets, two payrolls, etc.).

You might benefit if you can get insurance coverage for both entities from the same company -- two separate policies, one for each entity, but from the same underwriter -- that way there's no subrogation arguments between insurance companies should an issue arise, particularly around any shared stuff. Again, something to discuss with your insurance agent.