There are a host of benefits to using a Series LLC. It truly is the entity that offers something for everyone. Whether you’re looking for tax perks, operational or administrative benefits, easy ways to grow your business, or asset protection, the Series LLC has you covered. Read on to learn more about these and some other benefits you can reap from using a Series LLC.
Series LLCs Let You Grow Your Business Forever
Take a look at the picture below to understand the Series LLC structure. You’ll notice there’s an operating company on top, and multiple companies beneath. We use the metaphor of father to make the point that this structure lets you have as many kids, or Series, as you like.
Although our example has three Series, you can literally grow your business until the end of time. Each Series is its own LLC, and you can create new ones easily as you acquire more investments or other assets. As a bonus, you save money by using a Series LLC rather than the same amount of Traditional LLCs. You pay the costs of establishing the LLC once, and only once.
Series LLCs Protect Your Assets
The Series LLC’s structure isolates your assets, allowing you to have full liability protection for each one. Each asset is secured in its own Series, which functions as its own LLC.
In practice, using a Series LLC makes you very difficult, or at least highly impractical, to sue. Even if someone has a good reason and the resources to sue you, their attorney may not want to. Why? The reasons are pretty simple:
- Anonymity protects you as an individual, and keeps your name off of the assets. Without a name, it’s impossible to sue you personally. Suing the assets is possible, but more difficult.
- Isolated assets mean only one asset is ever vulnerable at a time–the rest of the structure is immune to litigation.
- Asset protection strategies in general make that sole asset someone wants to sue you over not that worthwhile. Attorneys don’t like to take cases if there’s not a prize (in the form of cold, hard cash or a valuable asset) worth fighting for.
This is just the quick and dirty version. See our previous article on how the Series LLC prevents lawsuits to learn more.
Series LLCs Offer Tax Benefits
That’s right, even Uncle Sam is kind to the Series LLC. We could write a whole article on tax benefits alone, but here are our top two.
Save on Taxes
The Series LLC is represented only in its “home state.” This means, if your Series LLC is formed in a state with no sales tax, you get to skate on sales tax. For real estate investors, this means rental payments between Series aren’t subject to sales tax.
The beautiful part is, you don’t even have to reside in the state you form the Series LLC in. If you’re itching to save on taxes, consider the Texas Series LLC. This entity will also help you save money via pass-through taxation.
Simplify Your Returns
Even though you can have as many Series and assets as you want, you’ll still only file one tax return for the whole shebang. The operating company, or parent company, is the only one that you’re required to put on the form. Of course, you’re still paying taxes on the “children” (Series), but it’s all reported as a single entity.
All these benefits and more can be yours. Contact us today to schedule your Series LLC consultation.