Series LLCs: Where are they allowed and how do they differ from other LLCs?

Where are series LLCs allowed?
The series LLC is a creation of the state. Only in certain states are series LLCs allowed to be formed. Delaware was the first state to enact legislation authorizing the creation of series LLCs. Several states have followed suit including Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas, Utah and Puerto Rico.
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An uncommon form of LLC that has grown in favor recently is a series LLC, or a limited liability corporation with series structure. The creation of many “series” within the LLC, each with its own assets, liabilities, and members, is possible with this kind of LLC. Because the assets of one series cannot be used to pay the liabilities of another series, this structure offers some asset protection for each series. But what distinguishes series LLCs from other types of LLCs, and where are they permitted? Where are series LLCs permitted?

18 states, including Alabama, Delaware, Illinois, Indiana, Iowa, Kansas, Missouri, Montana, Nevada, North Dakota, Oklahoma, Puerto Rico, Tennessee, Texas, Utah, Wisconsin, and Wyoming, currently permit the formation of series LLCs. If you’re considering this type of structure for your company, it’s crucial to be aware that each state has unique laws and regulations governing the creation and administration of series LLCs. Does a Texas single-member LLC have to pay franchise tax?

If they satisfy specific requirements, single member LLCs in Texas are exempt from paying franchise tax. In particular, the LLC is exempt from paying franchise tax if it had no gross receipts for the year and had assets totaling no more than $1,000. The LLC must submit an annual report to the Texas Comptroller and pay franchise tax if its gross receipts are $1,180,000 or more.

What distinguishes a professional LLC from a series LLC?

A sort of LLC known as a professional LLC, or PLLC, is created especially for licensed professionals including doctors, lawyers, and accountants. A series LLC and a PLLC vary primarily in that a series LLC may construct many series inside the LLC, whereas a PLLC may not. Additionally, unlike series LLCs, PLLCs are subject to specific regulations and standards. How do I include a series in my LLC?

You must first submit a certificate of designation to the state where your LLC is registered in order to add a series to your LLC. This certificate will include information about the new series’ name, objectives, and participants. The new series will be created and permitted to function independently within the LLC after the certificate has been approved.

What distinguishes a series LLC from a restricted LLC?

Arizona and Florida are two states that permit the formation of restricted LLCs. This kind of LLC is subject to specific operational limitations and could need to keep a particular amount of assets on hand. A series LLC can construct many series inside the LLC, whereas a restricted LLC cannot. This is the major distinction between a series LLC and a restricted LLC. A series LLC also offers increased asset protection for every series under the LLC.

Finally, series LLCs are a special kind of LLC that offer a certain level of asset protection for each series inside the LLC. They are permitted in 18 states, each of which has unique rules and legislation that govern their establishment and operation. If they meet specific requirements, single member LLCs in Texas are exempt from paying franchise tax. A PLLC and a restricted LLC cannot have more than one series within them, but a series LLC can. A certificate of designation must be filed with the state in order to add a series to an already existing LLC.

FAQ
Moreover, how is series llc taxed?

Series LLCs are taxed in a manner comparable to that of ordinary LLCs since the IRS considers them to be pass-through entities. This means that the owners or members of the series LLC receive a pass-through of the revenue and losses, which they then disclose on their individual tax returns. It is crucial to remember that each state may have different tax laws and regulations pertaining to series LLCs, thus it is advised to seek specialized advice from a tax expert.

Accordingly, is an s corp the same as a series llc?

No, a S corporation (S corp) and a series LLC are not the same thing. Although they both provide business owners with liability protection, the two companies have different structures and tax treatment. A series LLC is a sort of limited liability company (LLC) that can create several series or units inside the company, each with its own assets, liabilities, and members. An S corp is a type of corporation that has decided to be taxed under Subchapter S of the Internal Revenue Code.

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