Updated about 7 years ago on . Most recent reply
Series LLC book keeping
Good morning!
Just wondering if anyone has any thoughts on bookeeping for a Series LLC? Our CPA recommended separate checking accounts for each property in a Series LLC. Seems like there could be a simpler solution with specific documentation relating to transactions in one business checking account but not sure... I use TenantCloud for tracking expenses, income received, etc... for each property.
Any advice is appreciated! Thank you!
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First off, I always suggest you get professional opinions but use common sense. If an attorney tells you that you can't do something without an attorney you can probably assume they have an ulterior motive. Find others to verify the professional's opinion. In this case, it actually would be making your CPA's job easier and therefor take less time which should mean that they would charge less.
Beyond that, you can look back to the Texas Business Code (BOC 101.602(b)(1)) which states the protection of assets only applies if "the records maintained for that particular series account for assets associated with that series separately from the other assets of the company or any other series." Though some have determined this doesn't directly mean that you need different accounts, I think it would keep things nice and clean should there ever be litigation in the future. If there is a transaction where funds (assets) are not clear and could be considered co-mingled, then you would be out of luck and the protection from series to series would be pierced. All assets could be subject to any judgement. If you are working with an investor friendly bank, your fees would be very minor compared to the asset protection you would be getting.