What is a Series Limited Liability Company?

Sometimes a regular LLC won’t cut it for what you want your business to do, and in some cases, the Series LLC is just what you need to get the business structure that works for you. It may take a little bit of extra work to do, but the benefits far outweigh the work to get them.

In some states there is also another kind of LLC, called a Series LLC. Currently permitted by law in the states of Delaware, Iowa, Illinois, Kansas, Nevada, Oklahoma, Tennessee, Texas, Utah and Washington, D.C., this is an LLC that is allowed to have an unlimited number of subsidiaries, called Cells. Each Cell is considered to be independent of the other cells, and may have different ownership and operators.

Run properly under state law, Series Cells can have liability protection from each other, meaning you could have several LLCs co-existing under one main LLC. The main LLC generally functions as a gatekeeper, and doesn’t always have a business of its own (although it certainly can).

There are some huge upsides to using a Series LLC, which we’ll talk about later on. One of them is cost. Once a Series LLC is set up, there is usually no cost to create Cells. They can be established by simple internal documentation, and set up in a matter of hours, rather than days or weeks. Plus, regardless of how many Cells are created, the LLC still pays a single filing fee, a single maintenance fee, and requires just one resident agent. In states with high filing fees, this one element can make a significant difference to your bottom line.

However, the documentation is more complex and there are other taxation considerations to be taken into account. Because Series LLCs are so unique, and require so much personalized tailoring, the nuts and bolts of planning, establishing and maintaining a Series LLC are beyond the scope of this blog. If you are interested in learning more about this vehicle and when it may be appropriate for your business, check out our product, Series LLC: The Ultimate in Business Structure Flexibility available on our website. We also offer personal consultation for just $100 for the thirty minutes, and it’s fully applicable toward formation services if you move forward within 90 days.

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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