How to Set Up a Series LLC: A Step-by-Step Guide

A Series LLC is a unique type of limited liability company that allows multiple business divisions, or "series," to operate under one parent LLC while remaining legally and financially separate from each other. This structure is especially beneficial for real estate investors, entrepreneurs managing multiple ventures, and businesses with distinct assets or liability concerns.

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The biggest advantages of a Series LLC include:

• Stronger liability protection by keeping assets in separate series.
• Cost savings compared to forming multiple traditional LLCs.
• Easier scalability when adding new properties, businesses, or investment assets.

However, not all states recognize Series LLCs, and setting one up requires careful planning to maintain legal and financial protections. This guide will walk through the step-by-step process of forming a Series LLC correctly, ensuring compliance, and maintaining liability protection.

Step 1: Determine If a Series LLC Is Allowed in Your State

Not all states recognize Series LLCs, and the legal status of these entities varies by jurisdiction. Before starting the formation process, you must first determine whether your state allows Series LLC formation.

States That Allow Series LLCs

As of 2025, the following states permit the formation of Series LLCs:

• Alabama
• Arkansas
• Delaware
• District of Columbia
• Illinois
• Indiana
• Iowa
• Kansas
• Missouri
• Montana
• Nebraska
• Nevada
• North Dakota
• Oklahoma
• Puerto Rico
• South Dakota
• Tennessee
• Texas
• Utah
• Virginia
• Wyoming

Each of these states has specific rules regarding registration, liability protections, and taxation, so reviewing state laws before proceeding is crucial.

What If Your State Does Not Allow Series LLCs?

If your state does not recognize Series LLCs, you still have options:

• Form a Series LLC in a state that allows them and register it as a foreign LLC in your home state. However, liability protections may not be enforced if your state does not recognize Series LLCs.
• Use separate traditional LLCs instead to maintain strong legal separation between assets.

Step 2: Choose a Name for Your Series LLC

Naming rules for a Series LLC follow the same guidelines as traditional LLCs, but additional considerations may apply when naming individual series.

Naming Requirements

• The parent LLC’s name must include “Limited Liability Company” or an abbreviation (LLC, L.L.C.).
• Each series must be clearly distinguishable if required by the state.
• Some states require that each series include a reference to the parent LLC’s name for consistency.

Checking Availability

• Search the Secretary of State's website to confirm the availability of the Series LLC name.
• Check trademarks and business name conflicts to avoid legal issues.
• If planning to operate under different names, consider filing a DBA (Doing Business As) registration for each series.

Some states require that the individual series be explicitly named in the Operating Agreement but do not require separate registration.

Step 3: File Articles of Organization (or Certificate of Formation)

To legally establish a Series LLC, you must file Articles of Organization (or Certificate of Formation, depending on the state) with the appropriate state agency, typically the Secretary of State.

What to Include in the Articles of Organization

Most states require the following:

• The Series LLC’s official name
• The registered agent's name and address
• A statement confirming that the LLC is authorized to establish multiple series
• The management structure (member-managed or manager-managed)

State-Specific Series LLC Provisions

Some states require specific language in the Articles of Organization to clarify the legal separation of series.

Filing Fees and Processing Times

Filing fees vary by state but typically range from $50 to $500. Some states offer expedited processing for an additional fee.

Step 4: Draft a Strong Operating Agreement

The Operating Agreement is one of the most critical documents for a Series LLC. It defines how the LLC and its series operate, their legal separation, and the rules for managing assets, liabilities, and business transactions.

Key Provisions to Include in a Series LLC Operating Agreement

• Authority to Create Separate Series: A clear statement that the LLC may form multiple series.
• Ownership and Management Structure: Define how each series is managed and whether it is member-managed or manager-managed.
• Asset and Liability Separation: Ensure the agreement specifies that each series has its own assets, debts, and financial accounts.
• Formation of New Series: Outline the process for adding additional series, including documentation and internal approvals.
• Tax and Financial Reporting: Define whether each series files taxes separately or as part of the parent LLC.
• Dissolution Rules: Explain how individual series can be closed or how the entire Series LLC can be dissolved.

A customized operating agreement is essential for maintaining the legal separation between series. Without this, courts may disregard the series structure, putting all assets at risk in the event of a lawsuit.

Step 5: Obtain an EIN (Employer Identification Number)

An Employer Identification Number (EIN) is required for tax reporting, banking, and business transactions. Whether you need a single EIN for the parent LLC or separate EINs for each series depends on how your Series LLC is structured.

When a Single EIN Is Sufficient

• If the Series LLC is taxed as a single entity with all series under one federal tax return.
• If all business income flows through the parent LLC and is distributed accordingly.

When Each Series Needs Its Own EIN

• If each series operates independently, has employees, or applies for loans or financing.
• If each series elects a different tax classification (e.g., one taxed as a partnership, another as an S Corporation).
• If required by state laws or banking institutions to maintain liability separation.

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How to Obtain an EIN from the IRS

1. Go to the IRS EIN application page (irs.gov).
2. Select the LLC structure and specify whether you need a single EIN or separate EINs.
3. Provide the business details, including the registered name, responsible party, and mailing address.
4. Receive your EIN immediately if applying online or within 4-6 weeks if applying by mail.

For real estate investors or businesses with multiple revenue streams, having separate EINs for each series is often the best practice to reinforce liability protection.

Step 6: Register for State Taxes and Licenses

Once the Series LLC is established, it may need to register for state-level taxes and business licenses. Requirements vary depending on the industry, location, and whether each series operates independently.

Common Tax and Licensing Requirements

• Sales Tax Permits – Required if any series is selling taxable goods or services.
• Business Licenses – Some states or cities require each series to register separately.
• Franchise Taxes – States like Texas and California impose annual franchise taxes per series.
• State Tax Filings – Some states require each series to file individual tax returns, while others allow a single return for the parent LLC.

State Tax Treatment of Series LLCs

• States That Recognize Series LLCs for Tax Purposes – Allow separate tax filings for each series.
• States That Require a Single Filing – Treat the Series LLC as one entity for state tax purposes.
• States That Do Not Recognize Series LLCs – May impose additional reporting requirements or refuse liability separation.

Checking with the Secretary of State or Department of Revenue in the state where the Series LLC is registered is crucial to ensure compliance.

Step 7: Open Bank Accounts for Each Series

A critical step in maintaining the liability protection of a Series LLC is keeping separate financial accounts for each series. This prevents commingling of funds, which could expose all series to legal risks.

Banking Best Practices for Series LLCs

• Each series should have its own business bank account to maintain clear financial separation.
• Use separate bookkeeping records for each series to track income and expenses independently.
• Do not transfer funds between series unless properly documented as a loan or transaction.

Finding a Bank That Supports Series LLCs

Not all banks recognize Series LLCs, so it’s important to:

• Call banks in advance to confirm they allow separate accounts for each series.
• Provide supporting documents, including the Articles of Organization and Operating Agreement.
• Ensure each series has its own EIN if required by the bank.

Without proper financial separation, a court could rule that the Series LLC does not provide true liability protection, putting all series assets at risk in a lawsuit.

Step 8: Maintain Compliance and Annual Filings

Setting up a Series LLC is just the beginning. To preserve liability protection and remain in good standing, the LLC and each of its series must follow state compliance requirements, including annual reports, tax filings, and proper record-keeping.

Annual Reports and State Filings

Most states require Series LLCs to file an annual or biennial report to maintain active status. Depending on state regulations:

• Some states require a single report for the parent LLC that covers all series.
• Other states may require separate reports for each series, which increases compliance costs.
• Failing to file these reports can result in penalties or dissolution of the Series LLC.

Checking with the Secretary of State’s office in the state of formation is crucial to staying compliant.

Maintaining Liability Protection

To ensure that courts respect the separation of series within the LLC, business owners must:

• Keep separate records and bank accounts for each series.
• Clearly identify each series in contracts and agreements to maintain distinct legal identities.
• Use proper bookkeeping and accounting software to track income, expenses, and liabilities separately.
• Renew business licenses and permits for each series as needed.

Failing to follow these best practices could result in a court disregarding the legal separation between series, putting all assets at risk in a lawsuit.

Final Thoughts: Is a Series LLC Right for Your Business?

A Series LLC is a powerful tool for real estate investors, entrepreneurs managing multiple businesses, and asset protection strategies. It provides:

• Stronger liability protection by separating assets between series.
• Lower administrative costs compared to forming multiple traditional LLCs.
• Flexibility for growth, making it easier to add new businesses or properties.

When a Series LLC Makes Sense

A Series LLC may be the right choice if:

• You own or plan to own multiple assets or properties and want clear separation between them.
• You want to minimize legal and filing costs while maintaining liability protection.
• You are operating in a state that recognizes and enforces Series LLC structures.

When a Traditional LLC Might Be Better

A Series LLC may not be the best option if:

• You do business in a state that does not recognize Series LLC liability separation.
• You plan to seek bank financing, as some lenders prefer traditional LLCs.
• You have complex business structures that require independent tax filings for each entity.

Before forming a Series LLC, it is essential to consult with a legal or tax professional to ensure that it aligns with your business goals and state regulations.

FAQs About Setting Up a Series LLC

How long does it take to set up a Series LLC?

The time frame depends on the state, but most Series LLCs can be formed within a few days to a few weeks, especially if expedited processing is available.

Do I need an attorney to form a Series LLC?

While it is possible to file the paperwork independently, an attorney can help ensure the Operating Agreement clearly defines each series’ liability protections, reducing the risk of legal challenges.

Can I add new series after forming the LLC?

Yes, most states allow business owners to create additional series as needed without filing new Articles of Organization. However, some states require internal documentation updates or additional filings.

What happens if my state does not allow Series LLCs?

If your state does not recognize Series LLCs, you may:

• Form a traditional LLC for each business or property instead.
• Register a Series LLC in a state that allows them, but understand that your home state may not recognize the liability protections.

Do I need a separate EIN and tax filing for each series?

It depends on how the Series LLC is structured. If each series operates independently, has different tax elections, or hires employees, it will likely need its own EIN and separate tax filings.

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• ✅ Complete Legal Toolkit
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• ✅ Affordable Legal Guidance
• ✅ Custom Legal Status Report

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