Setting Up a Series LLC: A Step-by-Step Guide

A series LLC, also known as a limited liability company, is a kind of LLC that consists of various “series” that operate independently while still being governed by a single parent business. Liability protection and flexibility for different enterprises or investments are advantages of this structure. Here is a step-by-step instruction manual for creating a series LLC.

Step 1: Pick a State

Because not all states accept series LLCs, you’ll need to pick a state that does. Delaware, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, Nevada, North Dakota, Oklahoma, Tennessee, Texas, Utah, and Wisconsin are among the states that permit series LLCs as of 2021.

Step 2: Pick a Name

Just as with any other LLC, your series LLC needs to have a distinctive name. Verify if the name is available in the business registry of your state.

Step 3: Submit Articles of Incorporation You must submit Articles of Organization to the Secretary of State of your state in order to establish a series LLC. This document includes a list of your LLC’s fundamental details, such as name, address, and the number of series you intend to establish.

Draft an operating agreement as the fourth step. Your series LLC’s organizational structure and operational procedures are described in an operating agreement, a legal document. It should detail how each series will be created, managed, and how earnings and losses will be allocated among the several series.

Can a series LLC be owned by an LLC? A series LLC may be owned by an LLC, yes. The flexibility and increased liability protection that this type of ownership structure can offer to investors or businesses under an LLC. What are the drawbacks of an LLC?

An LLC’s costlier setup and upkeep compared to a single proprietorship or partnership is one of its drawbacks. Additionally, some states could charge LLCs extra taxes or fees. How long does it take to form an LLC in Tennessee? Processing LLC papers in Tennessee normally takes 7–10 working days. By paying an extra price, the process can be sped up. Do I require a business license in Tennessee? You might need to apply for a business license in Tennessee depending on the nature of your commercial activity. If a license is needed in your location, you can find out by contacting the county clerk’s office.

Finally, creating a series LLC might provide advantages like liability protection and flexibility for numerous firms or investments. However, it’s crucial to pick a state that accepts this structure, submit the required documentation, and create an exhaustive operating agreement. Additionally, depending on your state and business operations, there can be drawbacks and extra requirements or expenses even if an LLC can hold a series LLC.