In a series LLC, different “series” or groups of assets or members can be included in the same limited liability company. The assets and liabilities of one series are distinct from those of another series because each series is recognized as a separate business inside the LLC. Due to the fact that the debts and liabilities of one series do not affect the others, this offers security for each series within the LLC. How Do I Form an Illinois Series LLC?
You must submit Articles of Organization to the Secretary of State in order to establish a series LLC in Illinois. The terms “Series” or “SLLC” must be in the LLC’s name and in the articles of incorporation to indicate that it is a series LLC. A draft Operating Agreement that describes the management and activities of the Series LLC is also required.
No, in Illinois, each series under an LLC does not require a separate EIN. For tax purposes, the series LLC itself just needs one EIN.
A series LLC is created with the intention of protecting the assets of each series under the LLC. Due to the ability to separate and safeguard different business lines and assets, this is especially helpful for companies with many lines of business or assets. Additionally, since each property can be held in a distinct series under the LLC, it might be helpful for real estate investors who own many properties.
An LLC that has limitations on its commercial activity is referred to as a restricted LLC. This indicates that the LLC is restricted to the types of commercial operations listed in its articles of organization. In contrast, a series LLC is free to conduct business as usual and can divide its assets and liabilities into various series within the same LLC.
Finally, a series LLC is a kind of limited liability corporation that enables the creation of several series within a single LLC and offers asset protection for each series. In order to establish a series LLC in Illinois, you must submit Articles of Organization that specifically specify that the company is a series LLC and that each series within the LLC is exempt from the requirement for a separate EIN. A series LLC’s main function is asset protection, and it differs from a restricted LLC in that it is not constrained in the types of businesses it can engage in.