What is a Series LLC?

A business operating in Illinois may operate as a limited liability company. Companies operating as an LLC have the ability to shield members and partners from certain types of liability. To take things one step further, a company may create what is called a Series LLC. The Series LLC occurs when a company creates distinct cells or individual subsidiaries of the parent company.

These cells or subsidiaries have their own debts, liabilities and other interests. Those who own real estate within an LLC commonly do this. With a series, each property may be sheltered from anything that happens to another property. However, any type of business may be able to create various cells within the LLC structure. To create a Series LLC in Illinois, a business would have to file Articles of Organization Form LLC 5.5 with the Department of Business Services and pay a fee of $750.

After the paperwork has been filed, the company would then have to file a Certificate of Designation on Form LLC 37.40 each time that a new cell has been created. Additionally, the business needs to specify on its Articles of Organization that it is authorized to create a series.

An entrepreneur may have many different options when structuring his or her company. With so many types of business entities, it may be worthwhile to talk to an attorney to determine which one may be best for a particular business. Legal counsel may be able to explain the pros and cons of selecting a particular business structure. Furthermore, an attorney may be able to create documents that protect the interests of the company while allowing it to operate under its chosen structure. As all situations are unique, this article is not meant to be specific legal advice.

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