How does a Holding Company own an LLC?

Think, "Berkshire Hathaway." Berkshire Hathaway is a holding company of many other companies. Take for instance Berkshire's recent majority purchase of BNSF or Burlington Northern Santa Fe. You invest in Berkshire which in turn invests in BNSF.

To make this a little easier to understand, let's think about it like this. I own a trucking company which is an LLC. To protect myself and my assets above and beyond my LLC, I have a holding company. Let's say one of my drivers hits a car full of lawyers on the way to a convention and lawsuits arise over my insurance, I can Bankrupt my LLC and open a new one. Still being fully protected because all of my assets(trucks and equipment are in a holding company.

The only difference why my trucking company is an "LLC" and not an "INC" is because I dont have investors and I do everything legitimately, thus paying less in taxes than an "INC" which is double taxed. Another topic. The only way law can get to you personally is if you commit to fraudulent acts within your LLC otherwise you are fully protected like an "INC."

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