Success Story: Client Gets Cell Going in Minutes; Closes Deal

One of the really powerful features of a Series LLC is the speed at which you can get a Cell created. Here are two examples:

In early May, we sent in 3 applications to create new LLCs in Wyoming. Unless you’ve got walk-in service, you have to courier documents or send them express or priority mail. Express and Priority should both be in quotes these days … because it’s going to be 3-5 days before it gets to Wyoming, no matter where you start. You can’t do new filings online and you must have original ink on each signature page. No scans, no faxes … and no expedite option. You get processed when you get processed. That can be anywhere from 5 to 15+ days.

So, off the applications go, and then: nothing. We’re left following up by phone, only to learn that our applications have been rejected. They are coming back by mail, with a rejection letter. We can’t resubmit until the rejection letter is received. As of today, we’re still waiting.

Now let’s contrast that with a Series LLC. I got an email from a client this morning. He was about to purchase a new property and wanted to know if we could get a new Cell created, so he could keep this property separate from other real estate investments. He had his name ready and the details were at hand. We sent his Cell document package to him in about 30 minutes.

Why the difference? Well, for starters, most of the Series LLC law states don’t have any filing requirement for Cells. That means we don’t have to check names, we don’t have to submit documents, we don’t have to wait for a stressed government worker to look at our material … we just create the Cell internally, using our own package. If the client needs a separate Tax ID, also known as Employer Identification Number or EIN, we can get that online in a few minutes (at least Monday to Friday, during daylight hours, not around holidays, and barring a conflict with the IRS ‘maintenance’ schedule). If the client needs to create a Series Cell package that is electing C or S Corporation, we have the documents at hand to build the package in just a few minutes.

This procedure works in all states except for Illinois. That state has chosen to require you to register the Cell’s name with the state to get full legal protection, and although you can file probably ¾ of required documents online for immediate processing, you can only file Certificates of Designation (the document used to notify the state of a new Cell) manually. We’re hopeful that this process will also be automated soon, until then it’s kind of a you-get-what-you-get situation.

But for the most part, if you have a Series LLC working for you outside of the state of Illinois, you’ve got something that can move as fast as you can in business and real estate investing. I can see this becoming a big advantage to real estate investors looking to get a property under contract NOW.

There are many variables when you’re structuring a business. That’s why it’s hard to go through a quick-service website. Unless you talk to someone who’s got some knowledge and experience on both the tax and the legal side, it’s hard to know what you don’t know. And that can leave you vulnerable.

Got questions? Contact us! We’re here for you.

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