A Series LLC for those businesses or individuals buying, holding, and selling various assets makes sense because of the ability to put each property in, basically, its own Limited Liability Company, instead of having all of the properties in one company.
Series LLCs are a unique feature that many states allow companies to use. By forming a Series LLC, you are in essence creating the opportunity for the creation of several LLCs underneath that one, “parent” LLC.
Side-by-Side Comparison of Series LLCs vs. Traditional LLCs
Feature | Series LLC | Traditional LLC |
Structure | One “parent” LLC with multiple “series” or subsidiaries | Single entity structure |
Liability Protection | Each series has its own liability shield | Single liability shield for entire LLC |
Asset Segregation | Assets can be segregated within different series | All assets are held within one entity |
Formation | One formation filing for parent LLC, with internal documentation for each series | Separate formation filing for each LLC |
Administrative Requirements | Maintain separate records and accounts for each series | Single set of records and accounts |
Annual Fees | Typically one fee for parent LLC (varies by state) | Separate fees for each LLC |
Tax Filing | Can file as one entity or elect to file separately for each series | Single tax filing |
Expansion Flexibility | Easy to add new series without additional state filings | New LLC formation required for each expansion |
Cross-state Recognition | May not be recognized in all states | Generally recognized in all states |
Complexity | More complex structure and record-keeping | Simpler structure and management |
Learn More about Trec Forms For the Purchase & Sale of assets in Texas
Investors in Texas, particularly those managing various investment properties, find the Series LLC structure beneficial. For example, an investor might own an agricultural property, lease it for hunting and livestock, own a multi-family housing unit, and a commercial strip mall. Traditionally, creating distinct LLCs for each property is advisable, but the Series LLC allows for separating assets and liabilities without the need for maintaining multiple entities.
Click Here to Learn More About Series LLC Formation in Texas
Using a Series LLC, this investor could create one Series LLC, “the parent”, and separate individual Series that hold each property, “the subsidiaries.” Each Series then functions as if they are entirely separate companies, but the management is much more streamlined from the investor/owner’s perspective. The assets and liabilities of each property are sequestered safely inside the Series, instead of being subject to each other and vice versa.
There are certain requirements for forming Series LLC in Texas that you must absolutely be aware of prior to forming your Series LLC. Attorney Nathaniel Gilbert aids businesses and investors in San Antonio, Texas, in forming and managing their Series LLCs, guiding them through the entire process from start to finish.. If you would like to read more about LLCs and Series LLCs in Texas, Click Here. If you would like to get in touch with Nate directly, Click Here.
If you’re considering forming an S Corporation in Texas, check out this detailed guide that walks you through each step of the process. From choosing a business name to filing the necessary documents, this article covers everything you need to know. Read more here.
Common Questions About Series LLCs
