What is a Series LLC?

Why is a Series LLC better than a traditional LLC?

How can I create a Series LLC?

Who controls the Series LLC?

What will be my title within the Series LLC?

What should I call my LLC or DBA?

What types of assets can be held in the same Series LLC?

Which real property should be held in the Series LLC?

Should my homestead property be held in an LLC?

What is a land trust?

You mention anonymity – how is this achieved?

Are trust documents public or private?

Shall we get the Operating Agreement & Trust agreement notarized at our bank?

Should there be a separate Land Trust document for each property?

What address should I use for a Land Trust when I am recording a deed?

Does each Series need its own bank account and credit card?

Why is the accounting so important?

How is money moved into an LLC?

How do I pay myself from the LLC?

How do I sign on behalf of an LLC that is doing business under a “doing business as” (DBA)?

E.x. Real Estate Business LLC with a doing business as registration of REI Investors

How do I sign for an LLC that I own personally?

E.x. Real Estate Business LLC

How do I sign for an LLC that is owned by a trust, of which I am the trustee?

E.x. Real Estate Business LLC, which has the registered member and owner as Real Estate Business Agent Trust, and Scott Smith as Trustee

How will I report my taxes from my Series LLC Asset Holding Company?

Where will the tax documents for my property be sent?

Should I have insurance?

Once the property is transferred into the Asset Holding Series LLC, what do I do with insurance?

Will a Series LLC in one state hold up in another?


Actual client questions and answers

  1. Should we use your Texas address for all of our paperwork because we are operating out of Texas or is a California mailing address ok?

Either address is fine.  But we recommend using a Texas mailing address, so that it cannot be linked back to you personally.  The Parent LLC must file annual reports and tax returns, among other paperwork.  For clarification, please use Scott’s business address for anything of public record.  You may use your address for anything private, such as bank statements, credit cards, etc.

  1. This will be a cash purchase, should we use the LLC’s name or our individual names?

You should try to use your individuals names a little as possible.  One of the reasons for this type of structure is asset protection through anonymity.

  1. Do we need any other information to set up the business bank account?

No, just the standard information to set up a business bank account.  However, a Series can have its own bank account and credit card IF, AND ONLY IF, you are accounting for the money separately for each Series. If you think you are going to get sloppy with your accounting, then it is important to have separate bank accounts and separate credit cards.  If the Series is operating under a DBA, then the DBA name can be used for the bank account.

  1. When opening a bank account for the business, what business name do I use?  KAR Assets LLC?  How do I go about obtaining an EIN for that purpose?

The instructions for obtaining an EIN by internet, mail, telephone, or fax, are found at this link: https://www.irs.gov/businesses/small-businesses-self-employed/how-to-apply-for-an-ein

  1.  Banking:   Will I need to make any changes to current setup?   I assume not but want to double check.  (currently have 1 business account for all the properties and use QUickbooks to track the revenue/expenses of each series using class tracking)

If we want a different bank account for each property that we acquire in the LLC, do we open them in the name of the parent LLC or the series LLCs?
This is will answer your previous question, as well as this question.  A Series can have its own bank account and credit card IF, AND ONLY IF, you are accounting for the money separately for each Series. If you think you are going to get sloppy with your accounting, then it is important to have separate bank accounts and separate credit cards.  If the Series is operating under a DBA, then the DBA name can be used for the bank account.

  1.  What is my title in KAR Assets LLC?

You are the Trustee of KAR Assets, LLC.

  1.  I know you had mentioned that no annual meeting and minutes are required for an LLC.  What is required to be done annually?

Texas only requires a yearly franchise tax filing – filed online with the comptroller. Otherwise no annual requirements are there unless the law changes.

  1.  Insurance:  what will be correct way to set up insurance once these changes are made?

Simple.  Contact your insurance agent and add the entity as an additional insured.

  1.  Bylaws:   The trust docs reference Board of Trustee bylaws…can you help me understand that?

Bylaws are used to govern a company.  They are company specific, so it’s really up to you as to what you would like in them.

  1.  If Laura and I get hit by a bus, how do I ensure that the trustee of my personal estate can step in to manage the assets?   Article III section 2D says if current trustees are unable to serve, then the Grantor (the LLC) can  appoint a new trustee, but in this example, we’re also both the only members of the LLC.  

Not sure how to answer this one.  But I’m super interested in the answer.  Would the court appoint a trustee?  Or does it go to his/her heirs?

  1.  Misc transactions: For things like property management agreements or arrangement with other vendors what’s the protocol? (eg do I set those up as agreements between them and me, the series, or the trust?

Always set these agreements up between the holding company (the individual series) and the vendor.  The purpose is to create asset protection through anonymity, so using your individual name may defeat that purpose.