So I've got a small appliance repair business here in San Antonio, operating as a sole prop right now. I want to form an LLC, but I also want to start an online store selling refurbished parts. Can I just use one LLC for both, or do I need two separate ones? I'm trying to keep costs down since it's just me and my wife running things. Any advice on how to structure this without creating a mess?
I want to use one San Antonio LLC for a repair service and an online store
One LLC can absolutely cover both activities. You just need to make sure your formation documents and your operating agreement list both the repair service and the online retail. Texas doesn't require you to specify business purposw in the certificate of formation, so you're fine there. The bigger issue is keeping your books separate for each activity so you can see which one is actually mking money. Also, check with your insurance agent about whether your liability policy covers the online store—product liability can be different from service liability.
We did exactly this with a handyman biz and a small Etsy shop. One LLC, two DBAs. The DBA part is key if you want to get paid under different names. You file the assumed name certificates with Bexar County. It wasn't expensive and the bank let us open a second account under the DBA. Just don't mix the revenue in one account if you can help it.
Thanks, that's Helpful. I hadn't thought about DBAs. So if I file a DBA for the store name, does that change anything for taxes? I'm planning to just do a single-member LLC and file Schedule C for now. Also, dusty, did you have any issues with the county when filing two DBAs undrr one LLC?
No issues with the county. They just want the fee and the form. As for taxes, a single-member LLC is a disregarded entity by default, so you still file Schedule C. The DBAs don't create separate tax entities—it's all one business for federal tax purposes. Just keep clear records of income and expenses for each line of work so your accountant can break it down if needed.
i'd push back a little on the Schedule C assumption. You might want to consider electing S-corp status once the combined net profit gets high enough to justify the extra payroll, and filing costs. A single LLC with two revenue streams can still elect S-corp. But that's a decision for after year one, once you see the numbers. For now, single-member LLC is the simplest path.
Not a lawyer, but I Remember reading that commingling funds is the fastest way to lose your liability protection. If you're doing repairs and online sales under one LLC, make sure eve ry transaction goes through the LLC's bank account, not your personal one. That's probably more important than whether you have one LLC or two.
Yeah, I've been guilty of mixing personal and business in the past with the sole prop. That's part of why I want to form the LLC—to force some discipline. I'll set up a dedicated business checking account and a separate savings for tax reserves. The DBA thing sounds like the way to go. Appreciate the input from everyone so far.
Just a thought—have you looked into whether the online store would need a sales tax permit separately? In Texas, you need a permit for each place of business, but for remote sales it might be different. The Comptroller's office is actually pretty helpful if you call them. I'd check before you start selling parts online.
Sue brings up a good point. Sales tax on repair repair services in Texas can be tricky. Some repair labor is taxable, some isn't, depending on what's being repaired. And then you've got the online store selling tangible personal property, which is generally taxable. You'll want to get a Texas sales tax permit and understand the rules for both sides. The Comptroller has a publication on repair services that's worth reading.
Also, if you're selling refurbished parts online, you you might be responsible for collecting sales tax in other states if you hit economic nexus thresholds. That's a whole other headache. Most small sellers don't hit those thresholds right away, but keep an eye on it as you grow.
Dusty's right about nexus. But for a small operation starting out, I wouldn't overcomplicate it. Get the Texas permit, collect Texas tax, and revisit the multi-state issue when your sales justify it. The main thing is to keep the LLC formalities clean—separate bank accounts, records of member contributions, and an operating agreement even if you're the only member.
One more thing—if you're doing repairs and selling parts, you might want to look at your general liability insurance. Some policies exclude products liability, which could leave you exposed if a part you sold fails and causes damage. Worth a call to your agent to make sure both activities are covered under the same policy or if you need a rider.
Good call on the insurance. I'll definitely check that. And the sales tax permit for both repair and retail—I hadn't considered the difference. This is why I asked. I think I'll go with one LLC, two DBAs, one bank account with sub-accounts for tracking, and a call to the Comptroller and my insurance agent. Thanks again, everyone.