Texas Series LLCs have a new feature as of June 1, 2022. New legislation passed in Texas allows for Series LLCs to register their individual “Series”. The registration goes through the Secretary of State and allows the individual Series to obtain an individual certificate specific to that Series.
The main benefit of this ability to register the individual series of a Series LLC is streamlining of the banking and overall operational process for Series LLCs. A Series LLC with a Certificate of Formation and Certificate of Good Standing with the Texas Secretary of State, which was previously only available for the first “parent” company in a Series LLC, is much easier to open new bank accounts for as well qualify for financing or loan origination. The public registration of the Series LLC is the main benefit to the new law, and looks to add authenticity and security for lenders, title companies, banks, and mortgage officers that was not previously available.
There are some restrictions and conditions on naming of the Registered Series, however. For example, suppose you set up a new Registered Series LLC with your attorney, called, “Texas Real Estate Investing, LLC”. Under the new rules, you must add “Registered Series” or “RS” to the name of the Registered Series LLC. So, the business name would be “Texas Real Estate Investing, LLC, RS Series 1” or something along those lines. The naming rules, at this point, are a little convoluted and have never been tightly controlled for Series LLCs in Texas and are likely to evolve as this practice goes forward.
If you want to know more about the general benefits of a Series LLC, or how your current Series LLC may fit into the new legislation about Registered Series LLCs, San Antonio Business Attorney Nathaniel Gilbert can help point you in the right direction for your unique business situation. For more on Series LLCs, Click Here. To contact Nate directly, Click Here.