How Does A Series LLC Work?
Let’s take a look at how the series LLC works. The series LLC will work it’s much like a parent child structure. At the very top, you’ll have your parent, series LLC. This is the company that actually will get filed. It’ll have an EIN number and an official formation document with the state whether it’s Nevada or Texas, Delaware, etc. Below the series LLC, you have the actual series itself. You’ll have series A, series B, etc. These are what I refer to as the children. A parent can have as many children as it wants, much like a series LLC can have as many children series it wants. The great part is that each one of these series is going to be treated for liability purposes as if it were its own LLC. So, what we do as a real estate investor is we hold an individual property or asset in each given series. That means if we have a lawsuit and resulting in some type of action against a house belonging to series A, it won’t affect the house belonging to series B, c, etc. Now you may have the need to be able to do joint ventures with other parties as your real estate business grows. These are treated just like LLCs. So series c, for example, could be a joint venture agreement with as many people as you would like. It’ll have its own EIN number, its own tax return and it can have its own operating agreement to conduct the conduct of the business of that JV agreement. So with a series LLC, what it will allow you to do is to expand your business in a very professional way, protect your assets. And best of all, with all of these companies and all of these assets that you own individually, this will pass straight up through the series to have one tax return. Which means thousands of dollars a year in tax preparation savings for you. My name is Scott Royal Smith, I’m an asset protection attorney specializing in real estate asset protection and I’d like to help you.