Concerns with the Series LLC

Series LLC Concerns

New Entity Comes with a Few Uncertainties

The series LLC is a relatively new entity and the case law is not as developed as other entities such as the traditional LLC. As such, the Series LLC is not for everyone. More predictable asset segregation comes from multiple entity filings. At this time the Series LLC is best suited for those who have decided that the costs to file and maintain multiple entities are not justifiable.

Situations Where the Texas LLC May Not Be Appropriate

The Texas series LLC may not be appropriate in the following situations:

  • where the tax and financial information of one series needs to be kept confidential from the members of another series.
  • where some series will be engaged in for-profit activities while other series will be engaged in not-for-profit activities.
  • where combined reporting for Texas franchise tax purposes will cause issues with allocating the franchise tax burden to each series.
  • where the activities of one series create a substantially higher level of liability than the other series.
  • where it will be difficult to keep clear records for each separate series, especially in connection with the ownership of assets (i.e. If each series is based out of the same office and the various assets are used by multiple series).
  • where a series will need to borrow from an institutional lender.

Additional Series LLC Information:

Texas Series LLCs
Series LLC Information for Real Estate Investors
How much does it cost to form a Texas Series LLC?
Do you have to maintain a separate bank account for each series in a series LLC?
How do I name a Series LLC?
Do I need separate EINS for each Series?