A Series LLC is a Texas entity structure that allows for multiple, distinct LLC entities to exist under one LLC filing. The idea is similar to a parent company with many subsidiaries, except that none of the subsequent LLCs formed under the original Series LLC is necessarily “under” a parent company.
What Does a Series LLC do, exactly?
Series LLCs are useful for real estate investors in Texas who are looking to hold multiple properties over a long span of time. Investors can acquire their first investment property in the original Series LLC, for example, Texas Investors, LLC, and it will be treated as a regular LLC. Subsequently, when the investors are ready to acquire a new property, they can form another LLC in the series, for example, Texas Investors A, LLC. This can continue for each new property acquired by the investors (Texas Investors B, LLC; Texas Investors C, LLC, so on and so forth).
The significant advantage of the Series LLC is that each property is treated as being its own entity—That is, the liabilities of each property are isolated to each individual property, so there is no robbing of one property to pay for the liabilities of the other. This isolation of the liabilities helps investors protect their assets and investments without the need for separate Operating Agreements, LLC filings and deadlines every year, and generally much less maintenance and corporate formality work on behalf of the members and managers.
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Texas Business Attorney Nathaniel Gilbert helps clients form LLCs and Series LLCs on a flat fee basis. Click here to learn more about different kinds of entity structures that might be right for your needs or to schedule a consultation with Nate.