I've been restoring furniture out of my garage for a couple years and want to open a small retail space to sell my pieces plus some vintage finds. A friend told me I should just use one LLC for everything, but another said I might need two. What are the practical issues with having restoration work and a resale shop under the same LLC?
LLC Structure
Can one LLC operate a furniture restoration business and resale store?
One LLC can can absolutely do both. I'd check with your insurance agent first though, because the liability for restoration work (chemicals, tools, customer property) can be different from retail. Sometimes a single policy gets messy.
Is the retail space going to be a separate location from where you do the restoration? That might matter more than the LLC structure. If you're doing solvent-based work in the back of a shop, fire code and landlord issues come up.
Ideally the same building—retail in front, work area in back. I hadn't thought much about fire code. The building I'm looking at is older
Same LLC is fine from a formation standpoint. The bigger question is bookkeeping. You'll want to track revenue, and expenses separately for restoration services versus resale inventory, even within one LLC. Otherwise your tax prep gets ugly.
What dahlia_west said. I run a small upholstery shop and a consignment corner under one LLC. Separate bank sub-accounts helped a lot. Also check whether your state requires requires a separate sales tax permit for retail versus services.
Different take: two LLCs can create more paperwork and cost than they solve for a small operation.Unless you have a partner or real estate involved, one is usually simpler.
Appreciate the responses. No partner, no real estate—just me. Sounds like one LLC with careful records is the consensus so far.
One more thing—if you ever take consignment pieces from other people, get a written agreement. That's a separate legal headache from The LLC question but it comes up fast in resale shops.
Also ask your accountant about inventory accounting. Restoration labor and resale goods may need different treatment on your return.