The Series LLC
Texas is one of the growing number of states that have recently allowed the creation of Series limited liability companies (the “Series LLC”). The defining characteristic of the Series LLC is the internal segregation of assets. What this means is that a Series LLC can designate different compartments, or “series,” within its overall structure that have separate rights, powers, and obligations with respect to the assets held by that compartment. If the assets of one series within the LLC become subject to a creditor, the remainder of the assets held by the other series typically remain safe. Furthermore, each series within the Series LLC may have an entirely separate business purpose or investment activity.
The Series LLC provides excellent flexibility to businesses wishing to insulate potentially risky assets from the rest of their operation and offers a convenient alternative to the wholly owned subsidiary business structure. The Series LLC has become quite popular among real estate investment companies, as well as oil and gas operations.
While creating a Series LLC isn’t much different than setting up a regular LLC, there are some technical pitfalls that could trap the unwary. Let the business entity attorneys at the McCleskey law firm guide you through the process and help determine whether a Series LLC is right for your business.