A Series LLC, or Series Limited Liability Company, is a relatively new form of business organization existing in some states, including both Illinois and Missouri. Series LLC’s are especially effective for business endeavors having different and distinct elements with varying purposes, services, or assets, such as agricultural operations.
Organization of a Series LLC starts with the registration of a Master LLC in the preferred state. The state of registration may be different than the state in which the business is located, such as Delaware, with a foreign registration in the home state. The members or owners of the Master LLC are secondary and separate Series LLC entities (each a “Series”). The members or owners of each Series are those you would ordinarily choose to benefit from ownership.
Each Series has assets separate from the other Series, names its own members, operates under its own operating agreement, and is liable only for its own debts and obligations. The Series are not separately registered, but are named in the Master LLC registration.
Series LLC’s have been effective for organizing:
- Property Development - separating acquisition from construction and sales
- Retail - serving distinct categories of customers, or operations such as retail versus wholesale elements
By way of example, an agricultural business may organize under an umbrella Master LLC, registering only once, but providing for separate entities for the following elements:
- Ownership of all land or different parcels;
- Equipment ownership and maintenance;
- Employment concerns;
- Animal ownership and management;
- Sale of production; and
- Any other distinct element.
The Series LLC structure may serve to insulate property ownership or other assets in one Series from employment related or other liabilities under a separate Series. Without the added cost of multiple registrations and annual maintenance costs, organizing as a Series LLC may easily allow for separating the different elements of your business operations.