Series LLC

A Series Limited Liability Company (Series LLC) is a type of limited liability company that allows for the creation of distinct series or cells within the master LLC. Each series operates as a separate business entity, possessing its own assets, members, and business purposes. Critically, the liabilities of one series are generally shielded from the assets of other series within the same LLC, and from the assets of the master LLC itself. This structure can offer asset protection and operational flexibility, particularly for businesses with diverse operations or investments.

The legal validity and specific regulations governing Series LLCs vary significantly by state. Some states have explicitly authorized and defined the structure through legislation, while others do not. In states without specific Series LLC laws, the enforceability of the liability segregation between series can be uncertain. States that recognize Series LLCs typically have specific requirements for how the series must be established and maintained to ensure liability protection. These requirements often include maintaining separate books and records for each series, operating under distinct names, and adhering to specific filing requirements.

The primary advantage of a Series LLC is the potential for reduced administrative costs and increased operational efficiency compared to forming multiple individual LLCs. Instead of establishing and maintaining separate legal entities for each distinct business activity, a single Series LLC can house multiple series under one umbrella. However, the complexity of the structure requires careful planning and diligent adherence to applicable state laws to ensure the desired liability protection is achieved. Due to the varying legal landscapes and inherent complexities, it is strongly recommended to seek professional legal and accounting advice before establishing a Series LLC.