Series LLC

[S Manns]

Has anyone heard of an series LLC? If so can anyone briefly point out the advatages/disadvantages if any? Thanks!

[Brian Bradley]

@S Manns I am an Asset Protection attorney and Specialize in Series LLC. 17 states at this point have Series LLC's, and many other states like Florida have revised their LLC statutes and recognized Series LLC and even mentioned them in some recent case law. Their should be 20 states by next year that have Series LLC.

@Will Barnard and @Dawn Vought have gone over what is a Series LLC. It is a parent company LLC that then has children series LLC underneath it. As you add assets you add children / series to the parent Series LLC. This allows you to separate the liability out for each asset. And at the same time filing one tax return on the Parent Company.

CA is a state that is extreme and will tax with the franchise tax each child series $800 franchise tax per series. So we do not recommend these for CA clients. Rather we use DST's which are Delaware statutory trusts. They do not pay the franchise tax, since they are classified as estate tools, but allow you to separate assets into series.

Pertaining to the Series LLC, you need to look at the independent liability shield for LLC for each state that you invest in that do not have Series LLCs, That will tell you if that state recognize the separation of assets in series and will uphold the liability shield for members. You will also want to look at that states 'charging order' and if the SOLE remedy is a charging order or not. You want the sole remedy to be just a charging order.

You want to establish your Series LLC in a state that obviously has them, and out of those 17, that have strong Asset protection laws like TX, DE, NV. Then you file with each state that you start investing in and in your own state tax doing business as. Then start investing, and purchasing assets and transferring them via a legal trust into your S-LLC. The trust is the key component that works with the Series LLC to legally transfer the property and avoid any due on sale clause with banks or lenders.

Lets say you have a TX or NV or DE Series LLC, but have decided to invest in one of the states that does not recognize the Series LLC and have not updated their LLC Statutes, and their State Courts have not mentioned a Series. What do you do to protect yourself?

Try this.

Keep separate books and accounts, each series should have its own name, register only that series as the foreign entity doing business in that state, all contracts should be properly signed by that Series only giving notice. Document very well, capitalize adequately the name of the series that is doing business.