A Series LLC is a type of LLC allowed in 9 states (Utah, Nevada, Illinois, Texas, Delaware, Iowa, Oklahoma, Tennessee, and Wisconsin) that provide liability protection to each ‘Series’. A series is a separate entity under law but does not require a separate entity filing with the state or a separate tax return. The benefit of a series LLC is that each series is protected from liabilities arising from the other series and that the series LLC as a whole can file one tax return.
The most common use of a Series LLC is a real estate investor or developer who desires separate liability treatment for each of their properties or projects. By using a series for each, they can avoid the additional cost or hassle of a separate regular LLC for each property.
A Series LLC files a “Master LLC” with the state and authorizes itself to create separate series, which have a distinct name. Each separate series must keep its assets, books, and records separate from the other “series” in the Series LLC. In order to ensure separate treatment for liabilities, the series LLC itself must ensure that it is taking measures to properly separate the business activities of each series.