Multiple Business Functions In One LLC?

[Trevor White]

Hi all,

I currently have an LLC from a prior business where I sold things on eBay. The business is still active; however, I'm not ordering any new inventory and plan on stopping operations when all my current inventory is sold. My question is, can I use my existing LLC to hold real estate investments even though it is listed with the state as a company which does e-commerce? I would likely do a DBA or rename the LLC since the current LLC name doesn't make much sense for a real estate company.

My next question would be if I keep the LLC as is and just do a DBA - should I keep a separate set of books for the DBA? or does it need to all be in the same set? I currently use Quickbooks online for the eBay part of my LLC and I worry that if I start putting in real estate transactions it's going to make the chart of accounts confusing. I also have a bank account and credit card using the current name of the LLC.

I'm happy to provide additional details if needed. Just looking for additional guidance. I live and operate in Maryland, btw.

Thanks!

Trevor

[Frank Chin]

If I were in your shoes, I would terminate the LLC you currently use for Ebay, and if you choose to use an LLC for your real estate holdings, start a new one from scratch. Real estate is very different from Ebay.

Everyone's situation is different. In my case, I don't use an LLC for my real estate holdings. but use an LLC for an active business, an S Corp. with a DBA for 2 different businesses, and a C Corp, since closed, for real estate management.

In my view, closing one and opening another would involve paperwork and fees, but keep your accounting much cleaner, as you probably agree. For my active businesses, I have sales tax certificates for the different entities. I have employees in my LLC, and prior to Obamacare, if I get health insurance for myself, I have to obtain it for my employees, hence the management under the C Corp with health insurance where there are no employees. So for many other reasons, including unemployment insurance, workman's' comp it's cleaner to keep things separate than one massive accounting mumbo jumbo.

One other reason for closing a business after a certain period of time is you'll won't be liable for things that occurs in the closed business, that you won't have people getting after you.