A Guide to Series LLCs

A series LLC can be a great way to segregate assets and limit liability within a single company. But this unique option isn't for everyone.

Updated by Amanda Hayes, Attorney University of North Carolina School of Law
Updated 9/25/2025

A business is full of different moving parts. In some cases, it can be helpful to separate these moving parts into independent ventures. You can form multiple companies to manage the various areas of your business. Alternatively, you can form a series limited liability company (LLC) to manage the different businesses under one master entity.

What Is a Series LLC?

A series LLC is a unique form of LLC in which the articles of formation specifically allow for unlimited segregation of membership interests, assets, and operations into independent series. Each series operates as a separate entity with a unique business name, bank account, and separate books and records. But these series all exist together under one parent or umbrella LLC.

As a business entity, series LLCs are very flexible and simple to use. The series LLC can be used by real estate investors who own multiple properties. Each series isolates and protects its properties from the liabilities of properties in other series. Companies with different profit centers can use series LLCs to segregate and shield each business operation.

If your business has a range of operations and investments, you could decide to create a series LLC to mitigate risks and liabilities. For example, suppose you own a restaurant. Along with the restaurant, you also provide catering services and operate a food truck. You could form a series LLC where one series manages the restaurant, another series manages the catering business, and a third series owns the food truck.

Each Series Can Have Different Members and Managers

The rights and obligations of members and managers differ from series to series. Each series can have a different number of members and managers. These members and managers can overlap between series.

For example, suppose a real estate group wants to form a series LLC to own multiple investment properties. In one series, Denise and Kia are the sole members. In a second series, Diego, Anne, and Kendall are members. In a third series, Kia (from the first series) and Diego (from the second series) are members.

Example of how a series LLC operates for real estate investors

Each Series Can Own Property and Sign Contracts

A series can be a party to a contract. It can also hold title to real and personal property. As a separate contracting party, each series can sue or be sued.

Let's look at our real estate example from earlier. The first series could own a single-family rental home. The second series could own an office building that it rents out to local businesses. The third series could own a residential duplex. Each series would independently own these real estate properties, meaning that the first series would have no rights or interest in the office building or duplex. Likewise, the second series would have no ownership in the residential homes, and the third series wouldn't own the single-family rental or office building.

Now, suppose a recession hits and the LLC can't find tenants for its office building. As a result, the business takes out a loan under the second series. The other two series aren't responsible for the new debt. If the loan isn't repaid, the creditor can only sue the second series. In other words, only the second series' assets can be taken to satisfy the debt.

Each Series Has Separate and Limited Liability

The most important characteristic of a series LLC is the liability protection available to each series. Assets owned by one series are shielded from the risk of liability of other series within the same series LLC.

A series LLC is similar in concept to a corporation with several subsidiaries. However, the series LLC concept is designed to segregate risk within separate entities without the cost of setting up new entities.

Should You Form a Series LLC?

When deciding whether a series LLC is the right fit for your business, you should consider the benefits and drawbacks of this unique entity. A series LLC can be a great option for some types of businesses, but it isn't for everyone.

Advantages of Series LLCs

A series LLC has several advantages.

You can limit liability within your company. By creating series within your LLC, you can control how risk and liability are distributed across your business. If one part of your business is riskier than another, you can shield assets by placing them in one series while pursuing the riskier business streams in another series. In addition, if you take on debt in one series, creditors can't go after your money and assets in a different series to recover that debt.

To maintain the liability protection of each series, it's important to treat each series as a separate company. You can take active steps to regard each series as its own entity, including:

  • having a separate bank account
  • maintaining separate books and records
  • signing contracts using the name of the series
  • documenting all transactions, and
  • keeping adequate amounts of capital on hand for business purposes.

You can more easily manage varying interests and objectives. When you have a business that offers separate but complementary goods and services, you might feel like you're running multiple companies under one helm. Each "company" might have different needs, goals, and interests. If you form a regular LLC or corporation, the needs of one area of your business could negatively impact another.

For example, suppose you run a car dealership. At the dealership, you sell new and used cars, offer financing to customers, and repair vehicles. These three services all operate under the dealership, but each have unique needs and purposes. Some LLC members could be interested in car sales and repair, but don't want to bother with financing. Or, an LLC member could want to invest time and money exclusively in selling cars and not take any financial risk or responsibility in the other two wings of the business. Moreover, these three areas of service require distinct startup conditions. For the sales side, you need the vehicles and the distribution partnerships. On the repair side, you need the equipment and the mechanics. On the financing end, you need the tools and know-how.

If you create a series LLC, you can operate distinct areas of business under one umbrella LLC. Each series can have its own members, managers, assets, and liabilities. One series' operations and objectives don't have to impact the course of another series. You can, for example, take out a loan to purchase vehicles for resale, and your repair and financing businesses can be protected from that debt.

You don't have to form multiple companies. A series LLC can be a great alternative to legally creating more than one company for your business. This advantage can be particularly meaningful for business owners with large portfolios. Typically, a series LLC avoids the hassle of filing formation paperwork with the state for every LLC you want to create. While costs and requirements vary across states, a series LLC could end up costing less to form and maintain than multiple LLCs. But you should check your state's series LLC laws to make sure you understand the filing requirements and costs.

Disadvantages of Series LLCs

A series LLC has a few disadvantages to consider as well.

Series LLCs lack nationwide recognition. Not every state recognizes series LLCs. Delaware introduced the series LLC in 1996 to simplify U.S. Securities and Exchange Commission (SEC) filings for mutual funds. But not every state allows you to form one. If you do business in one of the states that doesn't have series LLCs, you'll either have to form one in another state (if your state lets you register an out-of-state series LLC) or choose another business structure.

You could encounter tax issues and complications. There are some unresolved tax issues regarding series LLCs, primarily regarding whether each series is a separate entity for tax purposes. The California Franchise Tax Board has taken the position that each series in a series LLC is a separate entity. As a result, each series must file its own tax return and pay its own LLC annual tax and fee if it's registered to do business in California. While some states take a similar approach to California, in other states, a series LLC files a single tax return. In addition, the IRS hasn't yet set a clear rule for how series LLCs should be treated at the federal level.

Laws around series LLCs are still evolving. Despite being around for a few decades, series LLCs still exist in an uncertain landscape. Generally, courts don't have a uniform approach toward series LLCs. Because LLCs, including series LLCs, are a product of state law, and because not all states recognize series LLCs, the questions around this business structure can be even more dubious. While you might opt to form a series LLC for its liability protections between series, a court might not uphold these protections. Moreover, series LLCs haven't been the subject of many court cases, so you'll find it harder to predict how a particular court will treat your series LLC.

Others might be unfamiliar with series LLCs. When you form a series LLC, you'll need to treat each series as its own, independent entity. As a result, you'll probably want to open a bank account and obtain an insurance policy under one series rather than under the master LLC. Moreover, if you take out a loan or sign contracts, you should use the applicable series' name, not the master LLC's name. Banks and insurers could be unaccustomed to working with series LLCs. Consequently, you might find it harder to open a bank account, take out a loan, or get an insurance quote.

Where Can You Form a Series LLC?

You can't form a series LLC in every state. For example, you can't form a series LLC in California. But if you're interested in this unique LLC option, you can form a series LLC in a handful of states, including:

  • Alabama
  • Arkansas
  • Delaware
  • District of Columbia
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • North Dakota
  • Ohio
  • Oklahoma
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Virginia, and
  • Wyoming.

You can also form a series LLC in Puerto Rico.

Some states, like California, don't allow for series LLCs to be formed under state law. But if you've formed a series LLC in another state, you can register to do business in California and some other states.

You'll need to look at the laws in your state to see whether your state allows you to either form a series LLC or register an out-of-state series LLC.

How Do You Form a Series LLC?

The series LLC is formed in much the same way as a regular LLC. Follow these steps to create your series LLC.

  1. Name your master LLC and each series. You'll need to choose a unique name for your parent LLC and each series. Some states require you to list the name of each series on the formation paperwork. You'll likely need to register each series' name as a DBA (short for "doing business as"). Your state might refer to a DBA as an assumed name or fictitious name.
  2. Determine a management structure for each series. Each series can have different members and managers. You should decide upfront how you want each series to be managed. You can choose for a series to be managed by the members or by one or more managers.
  3. Choose a registered agent. Typically, you'll need to appoint only one registered agent for your series LLC and not one for each series.
  4. File formation paperwork. You must file articles of formation—sometimes called "articles of organization"—with the appropriate governmental entity in a state where series LLCs are permitted. To be distinguished from a regular LLC, most states require that the articles of formation specifically state that the LLC is authorized to form a series. You'll also need to pay the required filing fee.
  5. Draft an operating agreement. You should create an operating agreement for the master LLC and one for each series you plan to form. The master LLC operating agreement generally provides rules for the overall operations of the series LLC. Likewise, operating agreements for each series provide customized rules for operations.
  6. Comply with tax and regulatory requirements. Make sure you apply for all the necessary licenses, permits, and tax accounts for each series. Each series might need its own license, permit, employer identification number (EIN), or tax account.

One of the benefits of a series LLC is that you only have to file articles of formation once. After forming the initial master LLC, each additional series is usually formed through internal mechanisms spelled out in the operating agreements. Typically, you'll create a new series by amending the master LLC operating agreement and adding the new series. However, some states require you to register each series.

Be sure to check your state's laws about series LLCs for specific guidance. If you have questions or would like to know how a series LLC would work with your specific business objectives, consult with a business lawyer. An attorney can help you navigate your state's LLC laws and help you make sure your company is complying with your state's laws.

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