Creating an individual Series for your Series LLC is a straightforward process, but there are some critical steps that you need to take. When creating the new Series, you are effectively creating a new LLC, for all intents and purposes, and just as when we are forming a new LLC, failing to follow the proper procedure can mean losing the protections an LLC provides.
First, Are You Authorized to Create Series for Your LLC?
In order to form individual Series for a Series LLC, your Operating Agreement and Certificate of Formation from the Texas Secretary of State MUST identify your LLC as a Series LLC, AND spell out the authority of the LLC to create individual Series for the LLC. More information on the required language can be found here: How Do I Form A Series LLC?
A New Series Requires An Amendment to Your Operating Agreement
Creating a new Series for your Series LLC will require amending the operating agreement to reflect the new Series. Usually, this is done via Addendum or Attachment, and the Addendum spells out the details of the new Series: The Series name, the Managers or Members, the purpose of the Series, and any other information that would be different than the original operating agreement. This Addendum is, after all, the operating agreement for the new Series (in a roundabout way).
Optional, But Good Practice: DBA for the Series
For my clients, I provide the service of registering a DBA (Doing Business As) name for the Series under the original LLC. So, anytime someone looks up the name of the Series LLC on the Secretary of State of Texas website, the names of each individual Series are listed along with the original LLC. This is not required for the formation of a new Series, but seems to be good practice in putting the public on notice of the existence of the Series, and showing its relationship to the original Texas Series LLC.
If you want to learn more about Series LLC Formation in Texas, San Antonio Attorney Nathaniel Gilbert ca help answer your questions and guide you through the process. To learn more about LLC formation, Click Here. To get in touch with Nate directly, Click Here.