All Forum Posts by: Danny Scott

 Try again... there are deficiencies with some of the laws as it pertains to a series llc and the concept itself is not quite developed in many of the states. 

It took a while for most of the states to get used to LLC's when initially created. Society usually gets used to these introductions gradually and a lot of refining of the current statutes in most of the states would be required.

Allergy to change is sort of how most states operate.

Review this by the ABA (Series LLCs in interstate commerce). A major problem is that in many of the states where you can create a series LLC, the series itself may actually lack separate entity status.

http://shorturl.at/cD126

The problem is not just in North Carolina... there seems to be uncertainties generally regarding whether or not a sub within a series LLC.. can prevail in court in a bankruptcy proceeding that looking to limit liability to the series sub for instance. The creditor would likely attack the primary LLC or any and everything linked to it.

If utilizing a Series LLC to execute a contract with a third party, you may have to include language in the contract that specifies the governing law as that of the state where the series was incorporated and raise the issue accordingly in court.

You may also have to select a federal court as venue to address a matter depending on the nature of the issue since the state is likely to say you have no standing if it in fact explicitly states that series are not recognized.

Have you reached out to the secretary of state's office in North Carolina to get an official response? If like some of the other states, they'll likely tell you they are not in the business of offering legal advise.

Not all states allow the in-state formation of Series LLCs, but all states recognise a Series LLC that is validly formed in a state that allows a formation of this type of entity.

However, as Richard wrote above, the best course of action is to seek the guidance of an attorney with experience in entity formation, and ideally, experience with Series LLC in particular.

Hi Danny,

There is a lot of information out there about this and I would recommend speaking to an attorney on this. With that said what do you plan on having the Series LLC do with the NC properties. It is very possible to structure your business in a way that you do not need to actually register the Series LLC as a foreign entity because it is not actually conducting business within the state. Again, there is a lot of information out there on this subject so it might be good to meet with an attorney to discuss it. The internet is great because there is a lot of information out there but it is also bad because there is too much information on a lot of things and conflicting information.