A series LLC, or limited liability company, is a type of business structure that allows for the formation of one parent company that can then be divided into separate entities. This offers several advantages over traditional LLCs, including improved asset protection and lower costs. In this article, we’ll explain what a series LLC is, how to form one, and what benefits it offers.
What Is A Series LLC?
A series LLC is a single parent company that can create several subsidiary companies under its umbrella. These separate subsidiaries are known as “series” and are legally distinct from each other and the parent company. The parent company has the authority to create as many series as it wants and they are all protected individually from any liabilities incurred by the other series within the same LLC.
For instance, if you own an investment firm and you want to own multiple properties in different states with different levels of risk associated with them, you could establish a single Series LLC and place each property in its own series. This would allow you to protect your assets from claims against any one specific property without having to establish separate LLCs for each one.
How To Form A Series LLC
Forming a Series LLC requires filing paperwork with your state's Secretary of State office just like any other type of business entity. You will need to file articles of organization that include information about the parent company and its proposed subsidiaries as well as some basic information about yourself. Once your paperwork has been accepted by the Secretary of State office, you will officially have established your Series LLC.
Benefits Of Forming A Series LLC
The primary benefit of forming a Series LLC is asset protection; each series is legally distinct from the others so creditors cannot pursue assets held by another series within the same parent company. Additionally, forming a Series LLC often results in cost savings compared to creating multiple traditional LLCs since you only have to pay filing fees once instead of multiple times. Finally, managing your business entities under one umbrella can make it easier when it comes time to file taxes since all activities will be consolidated under one entity rather than having to manage multiple businesses separately.
In conclusion, forming a Series LLC can be beneficial for business owners who wish to protect their assets while also saving money on filing fees and simplifying tax-time processes. If you think setting up a Series LLC may be right for your business needs, contact us today at (312) 803-1755 or online and we can provide guidance on how best to proceed in forming your new entity.