What is a Series LLC
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- Опубликовано: 29 сен 2024
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In this video, I discuss what is a Series LLC and how it is set up. There are only a handful of states that recognize the Series LLC and careful attention should be given to how this entity is used. The following states recognize the series LLC by statute: Alabama, Delaware, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, Nevada, Oklahoma, Tennessee, Texas and Utah. The District of Columbia and Puerto Rico also have provisions for Series LLCs but it is not as clear on how they will be respected. California has not authorized Series LLCs by statute, but it does allow Series LLCs that were formed in other states to register as a foreign entity and do business in California so it can tax each series $800 each - ouch.
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Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth.
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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
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I've been looking for this structure for years. I've called it an umbrella company for years and nobody was able to help. Thanks!!
Why would you need to create another LLC to “manage” LLC 1 and 2? And the Mother LLC, with only me as the managing member, is listed with the Secretary of State as the Managing Member of LLC1 and LLC2 ? A lot of info missing in your video.
Please clarify the details. Even if it’s just one person for the Mother. LLC, do I still need an operating agreement stating I have full authority to create/ manager LLC Series1 and LLC Series2 ?
The WY LLC give you anonymity that is why we have it in our structure. A management entity is often used to consolidate the rental activity at one point because the cells may not have bank accounts. Yes you must always have an operating agreement.
Hi Clint. I'm with Kenneth & John... will this work for other business. In my case publishing company, coaching services, author income from book from publishing company.
Thanks!
Clint, I like your videos but please take the time to write and draw more neatly! You always write LLC like (((.
I am a retired transactional real estate attorney. Been a few years since I've done this type of work, but my sense is that this guy
Mr. Coons, he is top-notch. I've never met him, and I'm not paid. Just my opinion. And I've known a ton of real estate attorneys.
Thanks Mr. Coons for being so clear in your presentations! You rock, legally speaking
Thanks Craig. Much appreciated.
Can I LLC an investment property that is owned by three individuals equally, including myself and the property has no debt?
Sure.
Great video. Quick question. When you open up bank accounts for each of the individual series, do you use the parent EIN, or you should get individual EIN for each series and use the separate individual EINs for each bank account? Thank you.
You will need to use an EIN for each cell to open a bank account.
Thank you for the education. For clarification, if I live in a state that doesn't recognize the Series LLC, would setting up a Texas Series LLC as a real estate holding company make sense, or would it only work if the real estate was located in TX?
I am curious about this too
great info Clint! I just watched your "Best Entity For Flipping" video then this one which answered more questions that came up regarding my buy and hold strategy. Thanks so much!
Excellent. Thanks for watching.
Your video was the best. Very simple.
Wyoming Series LLC - Looks like on 06/29/2019 Wyoming created an opportunity for Series LLCs in their state????
Correct but you have the wrong date.
Who should be the registered agent of my Ohio LLC? can I make my wyoming LLC the registered agent or would i make tailor brands the company who formed my llc?
You must have someone who has a physical address is the state where the LLC is formed serve as your resident agent.
Question ❓ I've gotten my LLC from Wyoming, it's going to be my parent company, with that being said I don't need a business checking for my parent company right? I,ll just need one for the LLC where I will have the real estate right? Or does the Wyoming still need a business checking even though it's just a parent company?
Both need an account.
🆒 I just made my Wyoming LLC the manager of my newly Ohio. Is the series LLC sort of like a parent company?
The WY LLC is typically the member manager of the Ohio series LLC. The cells are then disregarded to the Ohio series LLC.
Can you create a new LLC as the parent/holding company and merge prior existing LLC's as the cells below it?
Yes you can.
Isn't this the same as an Umbrella company? Do o need to get a lawyer to set this up. They always say they can't answer legal questions. Can the company who setup my LLC do this?
I would assume so otherwise if you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
Do i need to be the manager of my parent Wyoming company, since im doing business alone? Then let my Wyoming be the manager of my Ohio LLC if I want aneminity?
Yes that is how the businesses are typically set up.
What’s the difference between this and a holding company?
This could be considered a holding company but without the anonymity.
We use this structure quite often for our private equity funds. The other structure we see quite often is Series LP. Not sure if that is the same for Real Estate
Never heard of a series LP. Series LLCs should only be structured in states that recognize them.
@@ClintCoons also do you guys use LP for real estate investments? It's one of the most common structures we use in Private Equity.
Lance Quek depends. The problem with a LP for many investors is the inability to take excess losses on their 1040 assuming the material participation test is met. The LLC makes more sense in this context.
I automatically like as soon as Clint's vids start.
😀
Can I setup a Texas Series LLC and purchase properties in Wisconsin? (The state I reside in).
No. The LLC will need to be foreign filed in WI to hold real estate. Also WI may provide for the creation of a series LLC but the statute does not give any protections so I would not use a WI Series LLC under any circumstance.
Wow I never knew this before. Definitely have to look into the specifics in my state of Massachusetts.
This video does not tell you “how” to set up a series.
🤷🏾♀️. All these videos are like this …….
I am in California with multiple Ca disregarded llc’s, I intend to form a WY series LLC with anonymity to host all those Ca llc’s , meantime I will form a separate WY llc ( not necessarily a anonymous llc) to act as manager, is this what you describe? Will tax reporting be completed with this series llc?
This is what I think imma structure my Buisness as, unfortunately I can’t afford a lawyer so I’m going to just do it myself and figure it out, luckily I love to read the fine lines
can I be a member or manager of an llc if im from a foreign country and not a us citizen? I just want to buy multiple residential property and have it rented or sell it in the future.
Yes you can
great! I'll take your services for this. I hope you don't charge a very high professional fee.
Does Wyoming and Ohio recognize them?
Yes
Can someone please clarify what the difference between a member, manager, and owner is for an LLC?
Series LLC is a no brainer. It's definitely a great way of doing business. I wish they offered it in North Carolina
I have a Series LLC in Texas. Would you recommend putting the LLC in a revocable trust or have it owned by a Wyoming LLC?
If you want additional level of protection then I would place in a WY LLC and have the WY LLC owned by your living trust.
@@ClintCoons so parent series llc owner is WY llc? Then the owner of WY llc is a living trust?
@@chrisr.9258 No, it´s WY Llc Is the Owner of the your "Trust" ok?Because with the WY LLC do you Have a Strong Level of anonymity and the Trust is up your level the protection why is private, do not open the Public.😉🤗
If I didn't tell them my Wyoming was going to be a series when i set it up, do i need to go back and tell them i want it to be a series? Or can i just list it as a manager of my Ohio? Which is what i Did.
You need to set up your LLC as a series if you want to use it as such.
@@ClintCoonsthanks!
I am looking to start a small service based LLC in NY. I want to ensure safety for all involved, so want to do it under Delaware. Any feedback if I should do 1) Open Delaware LLC as parent company, then a NY LLC owner by the Delaware LLC or 2) open a Delaware Series LLC and request for foreign authorization in NY by one of the series LLCs.
Brian I would not get overly complicated here with a service based business. It would be best just to set up a NY entity and avoid DE. You may want to obtain a small business loan at some point in the future and the DE anonymity could hurt your chances.
Does a tax return have to be filed for each LLC cell (or series)or just one consolidated tax return for the parent which summaries all financial activity of the cells?
Should separate bank accounts be setup for each cell(or series)?
Is there suggested naming nomenclature associated with each cell? For example, do the names of the cell (or series) LLC’s need to be the same as the parent with maybe wording such xxx llc - Series A , xxx, llc- series B. Etc.
No, because the cells are typically set up as disregarded entities. On the banking issue, we typically use a management entity to handle the accounting etc.. Yes, you must be very specific with the naming depending on the state where you are using the series.
Do the cells/series all have to be in the same industry or field? For example, could I have one cell for a landscaping business, another one for software services and yet another for a small auto repair shop, all under the same Series LLC? This would be in Indiana.
Thanks.
No they do not. Each can be run as a different business.
Could you have your Wyoming partnership LLC be the member of your series LLC? This would still give you your anonymity and the benefits of the series LLC right?
Correct.
can the cell LLC's be in different states from the parent LLC?
It would depend on the state where you set up the Series LLC I.e., whether the state treats the cells of the series LLC as a separate entity. If yes then possibly it would be recognized if the cell was foreign filed in the other state. To be safe most commentators would agree best practice would be not to attempt to use a cell in a non series state or in a state that does not recognize the cell as a separate entity.
@@ClintCoons it would be Indiana which I believe is set up for series LLCs
@@grahamscott677 Yes Indiana does appear to treat cells as a spearte entity but this does not guarantee another state would recognize it as such. I always recommend setting up a separate LLC for activity in other states and do not try and use the cell.
Could you combine two independent LLC's to create a Series LLC in Texas? One of the LLC's would be the main LLC and the other the series.
Yes. Typically we create a Wyoming holding LLC as the member manager of the Texas series LLC. This provides anonymity for your Texas series LLC. Remember you must set up an actual series or amend an existing LLC to get the benefit of using a series LLC.
What structure is used in the states that don't recognize series LLC, Florida for example?
In Florida I would use land trusts and have the beneficial interests held by an out of state DE series LLC in different cells. In other states it would be separate LLCs with our without land trusts. If you live in California then most likely Wyoming Statutory Trusts.
thank you for your efforts very informative in helping make some entrepreneurial decisions
Glad it was helpful!
I would like to ask some states treat serious LLC a separate businesses and some states treated as one ,and that will also determine if you need multiple or one LLC , EIN number or bank account
It would depend on how you are using the series LLC. Typically for passive assets, investors do not set up separate bank accounts for each cell.
Clint a good looking dude and a lawyer. I bet he got a bomb wife or gf
I tell my wife she is a 20 on a scale of 1 to 10. Key to a 30 year marriage. :)
@@ClintCoons u da man!
If later on, if there are have problems what are the risks in Wash dc? Thanks!
None that I know of however, it can make it more complicated when working with title companies.
Maryland doesn't recognize this form, but it's good to know that others states offer it like Texas.
Virginia does it's close
I am a non resident real estate investor, how can I use your services
Thanks
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
How is there no additional cost? You do have to pay an additional fee everytime you start a new LLC under the parent company.
Bernie with the exception of Illinois and Wyoming you do not have to pay a fee to set up a cell under the parent.
@@ClintCoons How do you go about doing that aren't they still LLC's?
@@berniesands6201 No, the cells are given the same status as a separate LLC but they do not have the same requirements to establish. A cell is set up via a cell agreement.
@@ClintCoons around about what do companies like yours charge to properly setup business structures for small businesses I'm not even in business just yet, but I want to get my Trucking Company structured the right way now but I don't have thousands to spare. Not just yet anyway but I need to get my business structured by someone that actually knows what there doing.
Could I just setup an LLC to the best of my ability and make some money and then properly restructure the Company that I already have once I have the funds to do so or would it have already attached my name to the company if I've done something wrong? One more thing if I'm to personally guarantee any credit cards wouldn't that also tie my name to the Company?
Can we model this for different business vehicles?
Yes but I am not sure it will provide any more protection for your business if employees are driving the vehicles.
I have Florida properties. Can I use land trusts in Florida and a series LLCs in Texas ( asset holding company in Texas and child LLCs), then use another LLC company in Florida (management company) to manage these properties in Florida? Thank you
Yes you can.
@@ClintCoons I have a similar case but maybe it will be better to have a Texas series LLC and every cell own every property in Florida ? and on top of that a living trust that owns the Series LLC ?. Will every property be protected and on the other hand avoid probate when I pass away ?
Can that parent LLC be under a Wyoming LLC?
Yes
Can you open a cell off the parent to put a property in it & them change the name of the cell to match the property address?
It depends on the state where the entity is set up and their rules for naming cells
In Delaware, can the series still be setup under the operating agreement. I know that Delaware just added a "new" Registered Series but can you still use this method or has it been superseded by the new one?
It it optional. The registered is an attempt at providing greater recognition of the series by institutions and other states.
Thanks for info. I will write down all states that I can use series lllc in. Game Changer.
Excellent!
How many series can you attach to the parent company? Whats the maximum
No maximum
Is there a limit on the number series?
No
Yuck! Maryland and Florida do not recognize it. Ugh.
Paul O'Connor how do you find out? I’m in GA
Trucker Jo Google and clicking into the sites from the search results.
Thank you
What's the difference between a parent LLC Vs a Holding LLC.
The parent is the main series LLC and the holding LLC is the WY LLC that owns the main series.
Real Estate Asset Protection I’m confused, you only can have a holding company with Wyoming?
Would this work for a car rental company ?
I have a video set to be released next week on that topic.
Thank s again !
I’m in CO and I don’t see that we can do that here. What is our option here in CO?
Separate LLCs for each property held by a WY LLC
Thank you!! Like do it in that State?
Great Video!!! I am smarter because of it.
Excellent!
Can the parent be in texas and the series or cells be used in a non series state?
No. It only works in states that recognize the series.
@@ClintCoons Can the parent be in one state and cells in another? Both states recognize series LLCs
@@ashiyer7 You will need to register the parent in the state where the cells conduct business.
Can you restructure your current LLC to a series ?
Yes you can but sometimes it is simpler to set up a new one.
Thanks Clint. I have been studying this structure the past few days and I am in love with it. By far Delaware has the best because some other states like Virginia you still pay the same annual fees for an added “series” that you would pay for a separate LLC.
@@mgmtcp That is correct but if you are conducting business in VA then you will need to set up your series in VA.
What's an Esquire?
Attorney
@@ClintCoons Ohhhh, cool
How much?