LLC Holding Company Questions

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OldWolf

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Howdy all, and thanks in advance for the help.

I was advised to set up a holding company system, using LLCs, for my business ventures. The idea was that the first LLC would allow me to transfer money between all of it's operating companies, but would protect my business assets should one of the operating companies fail. I received these instructions from someone I contacted via e-mail by referral.

Now I come to the problem. As part of his suggestions, he told me to get an EIN for the first company, the holding company (which I have set up), and to elect to be taxed as a partnership. He wasn't really clear why I should select partnership, but from my research, it's not possible to do that with a single member LLC. I can't get ahold of him now (I'd assume he's very busy), but I'd really like to get my first operating company set up so I can begin selling.

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In a slightly related question, as I understand it if I've bought merchandise with my money to be later sold in the company (once it's up), I can have the holding company purchase it from me (I have receipts for store bought items, and packing slips for items from ebay) for the value I paid, or have it set as owner equity. After the holding company owns it, I can transfer it into the operating company's name and begin selling it. Is this the correct, and easiest way to do it? If so, how would I correctly document it?


Thank you for your help on these two issues,
James Reynolds
 
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