Can An LLC Own Another LLC? Free Guide 2026

As a business owner, it can sometimes be beneficial to place your business ventures into a holding company. Doing so may offer corporate income tax benefits and could simplify your business operations while potentially reducing administrative costs.

But can one LLC own another? And how do you create subsidiary LLCs? What are the pros and cons of doing so? And what businesses can help you create a parent-subsidiary LLC structure?

We created this article to answer all of those questions. Whether you have one LLC or multiple businesses and subsidiary companies, keep reading to learn more.

Can an LLC Own Another LLC? 

Yes, one LLC can own another. An LLC that’s an owner of a business is called an “LLC member.”  LLC members have the same rights as other owners. This makes it possible to create a parent LLC and then hold another LLC with it (or even multiple LLCs, for that matter).

Starting one limited liability company just to hold another can get a bit confusing. But we’ll provide more information in later sections to figure out with this parent-subsidiary LLC structure is right for your business goals.

LLC Parent Company & LLC Subsidiary 

Before proceeding any further, it’s important to clarify two key terms – Parent LLC and Subsidiary LLC. Keep reading to learn what these mean.

LLC Parent Companies

An LLC-owning parent company is a holding company that exists primarily as the parent LLC. This just means that it’s structured to hold other LLCs, rather than functioning as a true limited liability company business itself.

That being said, a parent LLC can be more than just an umbrella LLC or holding company structure. It can also be its own functioning business. For example, you may have multiple LLCs under your main brand name to keep things like bank accounts and tax documents separate.

LLC Subsidiaries

Subsidiary LLCs are companies that exist under the parent company. A subsidiary company is sort of like the “child” of the parent LLC. 

To qualify for this distinction, subsidiary LLCs must be at least 50% owned by a parent company. When they are, the subsidiary LLCs get all of the same benefits as the holding company, such as pass-through taxation and personal liability protection for your assets.

Why Would an LLC Own Another?

People with multiple LLCs or multiple businesses may choose to create separate LLCs to manage risk more effectively. If you have just one LLC and it fails, then all of your business entities will fail, too.

However, if you hold multiple businesses under one LLC, then each becomes a separate legal entity with its own separate bank accounts and separate operating agreements. Each business entity that fails will be viewed as independent businesses, so the other businesses and LLC owners won’t be impacted.

The bottom line is that having a master LLC with other LLCs or other businesses under it is a form of asset protection that can be beneficial to some business owners.

Series LLCs?

As you research your options for holding multiple businesses under one LLC, Series LLC is another term that you may see. This is another type of LLC operating agreement that you may find value in as an LLC owner. We’ll tell you what they are and how they work below.

What is a Series LLC?

A series LLC is very similar to a parent-subsidiary LLC relationship. Essentially, when you create a series LLC, you give one LLC the ability to create another LLC through so-called LLC cells. It’s similar to how an S-Corporation works by placing a subsidiary under a broader corporation status.

Benefits of a Series LLC

The Series LLC structure offers similar benefits to parent LLCs with subsidiaries. Both forms equate to one LLC owning another and keep your own assets protected in case one business fails. You may also be able to save some money on filing fees when you use this method of having a separate entity owning another LLC.

Advantages of An LLC Owning Another?

There are a few main reasons why you might want to hold multiple businesses under one LLC. We cover each of the benefits of using an LLC holding company or an owner LLC below.

Liability Protection

The biggest reason to have one LLC owning another LLC is the liability protection that it offers. Your equity investment, bank account, and business lines of credit will belong to a single LLC. That way, each new LLC keeps its own records and doesn’t put any of the other LLCs at risk.

Enhanced Privacy

You might also want to have one business owning another LLC to maintain privacy. Your business bank account and operating agreement will be shielded from the other businesses. This can be beneficial for certain types of real estate investors, construction firms, and other companies with enhanced privacy needs.

Disadvantages of An LLC Owning Another?

Having one LLC old another LLC can be beneficial. But there are also some downsides worth considering before you choose this option. Here are two to keep in mind.

More Fees

First, you’ll have to pay your state’s filing fee each time you create a new LLC. The initial filing fee doesn’t include the cost of a registered agent either, which each LLC needs to have. There are also some situations in which you may have to pay corporate income tax or deal with double taxation, but these are rarer, and more common if you’re using an S-corporation.

More Work

There’s also more work involved when you have one LLC owning another. You have to fill out more forms and pay attention to more legal requirements, among other tasks. However, there are registered agent services that can take over a lot of these jobs for you, as long as you’re willing to pay for them.

How Can an LLC Own Another?

There are two main strategies you can use to have one LLC own another. Here’s a quick look at each of them.

Through Outright Ownership

Your first option is to have one LLC outright own another. This involves giving 100% control of the limited liability company to another LLC. The main reason to use this strategy would be if you want to remain in full control over the other LLC but prefer having some separation between business units.

Setting up a Parent LLC

It’s also possible to set up a parent LLC company. This may involve holding as little as 50% of the subsidiary LLC. It’s a good option when you want to share ownership of some LLCs, but not all of them.

The Top 2 LLC Services

This strategy can get a bit complicated, so it could be helpful to partner with a professional LLC creation firm if you want to use it. Here are two of our favorites.

ZenBusiness

ZenBusiness is a full-service LLC formation company that can also serve as your registered agent, provide accounting support, and help with business growth. The company stands out from the competition by offering after-hours customer support, which ensures you’re able to get the help you need no matter what time it is.

Northwest Registered Agent

Northwest is another solid option and one that’s slightly more affordable than ZenBusiness. However, it doesn’t quite offer as many services as ZenBusiness, and you won’t be able to get after-hours support from this firm.

Final Thoughts

Having one LLC own another can be a smart business strategy if you want to mitigate risk, share ownership, or just keep your business entities separate from one another. If you need help doing it, ZenBusiness and Northwest are two excellent firms you can count on to get started.

Ready to Start Your LLC Today?

Launch your business today: $0 LLC setup with ZenBusiness (exclusive Bizreport deal)

• ZenBusiness Velo: Your AI business assistant
• All-in-one platform to launch & manage
• Fast & affordable: $0 + state fees

Frequently Asked Questions (FAQs)