Series LLCs: Survey of States' Response to the Proposed Federal Tax Rules

A series limited liability company (Series LLC) is an innovative choice of entity that is created for three primary reasons: (1) to essentially segregate the entity into separate "series" between which an internal liability shield can be established; (2) to minimize legal, accounting, transfer, and recordation/registration fees that might otherwise result when forming a new limited liability entity or transferring assets between or among two or more entities; and (3) to minimize regulatory time delays required to approve a new entity versus supplemental filings for an existing entity that might otherwise result when forming a new limited liability entity. Currently, 11 states plus Puerto Rico and the District of Columbia have enacted legislation permitting the creation of Series LLCs with the internal liability shields for each series within the Series LLC.

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This article appeared in 15 Business Entities No. 5 (Thomson Reuters Tax & Accounting, September/October 2013).