What is a Series LLC? – Forbes Advisor
The process for forming a series LLC varies from state to state. Here are four general steps to keep in mind to make the process go smoothly.
Determine the Series LLC Name
Series LLC naming rules vary by state. They must adhere to general LLC naming rules, such as having a name that doesn’t look too similar to other state-registered business names and including an LLC identifier in the name.
Additionally, the parent LLC must have a separate name from its sub-LLCs. The parent LLC’s full name should generally be included in each series name. For example, “My Gift Shop LLC” could be the parent LLC while the sub-LLCs could be named “My Gift Shop LLC Series A” or “My Gift Shop LLC Series B”.
This makes it easy for creditors and investors to know that each child series is part of an LLC series. Additionally, some states such as Illinois and Kansas require the filing of a designation certificate for each series.
Get a registered agent
Most states require formal businesses to obtain a registered agent. This person will receive lawsuits and other legal documents addressed to the company.
Although registered agent requirements may vary somewhat, the agent generally must be a resident who has a business address in the state where the series LLC is filed. The agent may also be a company licensed to do business in the state where your LLC is incorporated.
Another option is to hire a company that specializes in registered agent services. Rates range from $49 to $300, but you should be prepared to pay a justifiable rate in exchange for their annual service.
Filing your Series LLC documents
You will form a series LLC by filing articles of incorporation with your national business registration agency, usually the Secretary of State). The articles must specify that the LLC may establish a series. Some states have a separate form for LLC series. Additionally, draft an LLC operating agreement to outline the ownership structure, member roles, provisions, and rules within the series LLC. You do not need to file the operating agreement with the state.
Most states have specific guidelines for filing and creating a Series LLC Operating Agreement. Be sure to read them and contact an experienced attorney to avoid any complications.