Company Formation

What Is A Series LLC? (2023)

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In the ever-evolving landscape of business ownership and entrepreneurship, various structures continue to emerge, providing entrepreneurs with versatile solutions to optimize their ventures.

One such structure that has garnered significant attention is Series Limited Liability Company (Series LLC). Designed to offer flexibility, asset protection, and operational efficiency, Series LLC has become a preferred choice for ambitious individuals seeking to establish and manage multiple business ventures within a single framework. We look into the intricacies of a Series LLC, describing its unique attributes, benefits, and the step-by-step process involved in its setup. Whether you are an aspiring entrepreneur or an established business owner looking to expand your horizons, understanding the potential of a Series LLC can empower you to unlock new opportunities and scale with confidence.

Series LLC Explained

Originating in Delaware in 1996, the Series Limited Liability Company (Series LLC) was initially inspired by the state’s statutory trust law, which found popularity among mutual funds. The statutory trust law allowed for the formation of an investment company as a trust with distinct series, each possessing its own portfolio, investors, and investment strategies. However, with the advent of the Series LLC, mutual funds gained access to a more adaptable entity—the LLC—offering enhanced flexibility compared to the statutory trust. While its origins may be rooted in mutual funds, the potential applications of a Series LLC extend far beyond that realm.

A Series LLC comprises a central “parent” or “umbrella” LLC with multiple series created within it. Each series possesses unique characteristics, including separate assets, members, managers, purposes, and investment objectives. Notably, the debts, liabilities, and obligations of a specific series are enforceable solely against its own assets, providing a distinct level of asset protection. Essentially, each series functions as an independent entity within the Series LLC structure.

This exceptional versatility renders Series LLCs invaluable for businesses engaging in multiple lines of operation or investments, allowing them to shield each facet from risks associated with others. Whether it be real estate investors managing various rental properties or investment firms pursuing diverse investment strategies, the Series LLC empowers such entities to achieve comparable liability protection without the need for separate LLC formations.

States that allow Series LLCs are the following:

  • Alabama
  • Arkansas
  • Delaware
  • District of Columbia
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • North Dakota
  • Oklahoma
  • Puerto Rico
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • Wyoming

Series LLC Advantages & Disadvantages

There are plenty of advantages and disadvantages to forming Series LLCs. We’ll break it down for you, starting with the advantages.


Initially, one of the primary advantages of opting for a Series LLC instead of creating separate LLCs was the potential cost savings in formation expenses. While recent trends in state laws now require the filing of specific documents and the payment of fees for each series, resulting in some associated costs, there may still be opportunities for savings. However, it is important to note that this advantage may not hold the same weight it once did.

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A key benefit of an LLC compared to other entity options lies in its remarkable flexibility, granting members ample choices when determining how to allocate management and financial rights, with minimal statutory obligations. This inherent flexibility extends to the Series LLC structure as a whole and is applicable to each individual series within it.

The Series LLC structure presents an appealing option for holding companies that typically own, but do not directly operate, a portfolio of businesses. By utilizing a Series LLC, a holding company can consolidate all its individual businesses under a single umbrella, effectively mitigating the risk of one business’s assets being utilized to satisfy the debts or liabilities of another within the portfolio.

The concept of liability protection within the Series LLC is relatively straightforward. Each subsidiary, or series, remains insulated from the risks and liabilities incurred by the other series within the structure. This separation ensures that the assets of one series are not at risk due to the debts or obligations of another, enhancing overall asset protection for the business as a whole.


The ability to establish and operate a Series LLC is not universally available in all jurisdictions. While the structure has gained recognition and acceptance in various states, it is essential to understand that not all jurisdictions permit the formation and operation of Series LLCs. Therefore, it is crucial to research and ensure that the desired jurisdiction allows for the establishment and maintenance of a Series LLC before pursuing this business structure.

The Series LLC is a relatively new and innovative concept in the realm of business structures. As a result, the legal framework and regulations surrounding Series LLCs are still evolving in many jurisdictions. The laws governing Series LLCs may not be as comprehensive or well-established as those for traditional business entities like single-member or multi-member LLCs. Consequently, business owners considering a Series LLC should be prepared to navigate potential legal uncertainties and consult with experienced professionals to ensure compliance with existing laws and regulations.

While the Series LLC offers the advantage of housing multiple subsidiaries within a single entity, managing a large number of subsidiaries can introduce complexities and administrative burdens. Each subsidiary within the Series LLC structure requires its own LLC operating agreement, annual reports, and accounting records, adding to the administrative workload. Additionally, there may be filing fees associated with each subsidiary, which can become significant when numerous subsidiaries are formed. Business owners should carefully consider the operational implications and associated costs before establishing an excessive number of subsidiaries within a Series LLC, ensuring they have the necessary resources and processes in place to manage the complexity effectively.

Types of businesses that will benefit as Series LLCs

While the advantages of establishing a Series LLC are plentiful, it is important to note that only certain types of businesses can fully leverage its benefits. It is crucial to consider the additional annual fees associated with each subsidiary, as it can potentially increase the workload. Furthermore, it is essential to verify whether your state permits the formation of series LLCs.

One significant advantage of Series LLCs lies in their suitability for real estate investors seeking robust liability protection. With no minimum or maximum limit on the assets that an LLC can hold, investors have the potential to create separate LLCs under the parent LLC for each property they own. This arrangement effectively safeguards each property from being held liable for losses incurred by other properties.

In addition to real estate investors, any company intending to operate multiple smaller and unrelated businesses can benefit from adopting a series structure. Similar to the property example mentioned earlier, an LLC can house multiple distinct LLCs (or other entities), each managing separate businesses. Business owners, like real estate investors, can enjoy the same liability protection advantages inherent in the series LLC structure.

Setting Up a Series LLC

The process of initiating a series LLC closely resembles that of establishing a regular LLC. The primary distinction lies in the requirement for the formation document of a Series LLC to include a statement affirming the LLC’s ability to establish protected series, shielded from liabilities of other series and the LLC as a whole. The availability of separate forms for Series LLC formations varies across states, with some providing dedicated forms while others do not.

While a Series LLC adheres to all provisions outlined in the LLC law, it is important to note that certain provisions specifically apply to Series LLCs. Examples of these provisions include requirements related to recordkeeping and limitations on liability. These unique provisions distinguish the governance and operations of a Series LLC from those of a traditional LLC.

The next step entails selecting suitable names for both the parent LLC entity and each subsidiary nested within it, while adhering to specific naming requirements imposed by the state. For instance, certain states mandate the inclusion of the parent name in the subsidiary names.

Subsequently, filing articles of organization with the appropriate state office, typically the secretary of state, becomes necessary. This filing typically includes a specific section or checkbox to indicate the formation of a series. In some cases, a distinct document may be required for series LLC formation.

Depending on the state of registration, you may be obligated to designate a registered agent for both the parent LLC and every subsidiary established within the series. Additionally, obtaining an Employer Identification Number (EIN) from the IRS for tax purposes becomes essential. Each of the parent and subsidiary entities will require a unique EIN, and the good news is that the application for an EIN is free of charge.


A Series Limited Liability Company presents a dynamic and innovative business structure that offers numerous benefits and advantages. The process of setting up a Series LLC closely mirrors that of a traditional LLC, with additional considerations such as naming requirements and potential separate formation documents. The Series LLC provides unparalleled flexibility, allowing each series to function as a separate entity with distinct assets, members, managers, and investment objectives.

Moreover, it offers liability protection, safeguarding each subsidiary from risks associated with other series. While managing multiple subsidiaries within a Series LLC can introduce complexities and administrative burdens, proper planning and resource allocation can help mitigate these challenges. As laws surrounding Series LLCs continue to evolve, seeking professional guidance is crucial to navigate the unique legal requirements and ensure compliance.

Ultimately, understanding the potential and intricacies of the Series LLC empowers entrepreneurs, real estate investors, and holding companies to unlock new opportunities, consolidate assets, and mitigate risks, propelling their businesses toward greater success in today’s dynamic and competitive business landscape.