A Series LLC for those businesses or individuals buying, holding, and selling real estate 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.
Real estate investors in Texas are especially keen to use this kind of company for managing different investment properties. For instance, an investor may have an agricultural property where he leases hunting and livestock to a local rancher. Additionally, the investor owns a multi-family housing unit in town, and a commercial strip mall property. Ordinarily, the best course of business would be to create separate unique LLCs for each property, and bear the burden of maintaining three different companies. Yes, all three properties could technically all be contained within one LLC, however, separating the assets of the commercial property from the liability of the agricultural property is almost always the most advisable course of action.
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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 helps businesses and real estate investors in San Antonio Texas form and manage their Series LLCs, and guides them through the 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.
