The Cost of Setting Up a Holding Company: What You Need to Know

If you’re thinking about forming a holding company, you’re definitely curious about the price. The truth is that depending on a number of variables, such as your state of incorporation, the kind of business you select, and any possible legal or accounting expenses, the cost of forming a holding company can vary significantly. Which Is Better for a Holding Company: LLC or Corporation?

Choosing whether to set up your holding company as an LLC or a corporation will be one of your first choices. Both offer benefits and drawbacks, so it’s crucial to pick the one that will work best for your company.

Because they provide the same limited liability protection as a corporation with less red tape and formalities, LLCs are preferred by holding corporations. However, a corporation can be a preferable option if you intend to publicize your holding business or raise significant sums of funds. How Much Does a Series LLC Cost? Using a series LLC, you can divide an entity into different “series”—each with their own assets, liabilities, and members—within the same legal structure. This may be a practical technique to handle several companies or investments. Depending on the state you reside in, the cost of forming a series LLC varies, but it is typically higher than that of forming a standard LLC. Additionally, you’ll have to pay annual fees for every series you produce.

An S Corp is able to own a Series LLC, right? You can own a series LLC as a S corporation, yes. You should be aware of some restrictions, though. For instance, managing the requirement that each series inside the LLC be recognized as a separate entity for tax reasons can be difficult and time-consuming. How to Name an LLC Series

In addition to the LLC name, you must also mention the name of the series when forming an LLC for a series. The full name of the series would be ABC Holdings LLC Series XYZ Ventures, for instance, if your holding company is called ABC Holdings LLC and you form a series called XYZ Ventures.

As a result, the price of establishing a holding company might differ significantly based on a variety of variables. Because they provide limited liability protection with less paperwork, LLCs are popular for holding firms, but corporations can be a better option if you want to go public with your company or raise a lot of money. Although it often costs more than forming a conventional LLC, a series LLC can be a cost-effective solution to handle many enterprises or interests. Additionally, if you’re naming a series LLC, you’ll also need to provide the name of the series.