Hi, I’m helping my GF who has a Airbnb Management/Cleaning business going. I’m helping her set up the LLC(s) and bank accounts. I assumed she’d just want one for the whole thing but she seems to think it’d be advantageous to have two for both sides of her business so they can more easily be compartmentalized and more streamlined to scale later—part of her rational is that she wants to hire staff for the cleaning side of things and she doesn’t want them to be employees of the management side.
It seems to me like this is just over complicating things early on but it’s her business and I don’t wanna step on her toes unnecessarily. What do y’all think?
Since this is a cleaning service rather than rental properties, I would make just one LLC.
If she wants them to be employees to the cleaning operation, yes, I would put them under a different entity that the property management company contracts with.
Lots of big property management companies actually do this. They spin up different companies for maintenance, cosmetic or structural repair, hell even emergency services.
The bigger headache is if she’s going to try overseeing both if they both end up growing, or one outpaces the other.
Just do one, she is just starting and neither one of those have heavy assets. She is creating paperwork just for the sake of paperwork. Also at her size most software expenses are from the minimum charge, with doing one she won’t have to double up on charges like QuickBooks and the like. If she wants different branding create the Management LLC and then do a DBA for the cleaning side doing that way she can also share assets between the sides of the business no problem. Also as you growand to keep employees you are going to want to start to offer benefits and a lot of places won’t talk to you till you have a minimum per of employees, combining them helps with that.