What Is a Series LLC? Definition and Use

Definition

Series LLC - A series LLC is a single parent LLC that creates internal series or cells, each holding its own assets, members, and liability shield walled off from the others.

A series LLC lets one filed entity operate multiple asset pools while segregating liability between them, so a claim against one series generally cannot reach another series or the parent. For example, a real estate investor holds four rental properties in four series under one Delaware series LLC, and a tenant lawsuit against Property A's series does not expose Properties B, C, or D. This can be cheaper and tidier than forming four separate LLCs.

The misconception is that a series LLC gives bulletproof, universally recognized separation. It does not. Not every state authorizes series LLCs, and a state that does not recognize them may disregard the internal walls in its courts, treating all series as one entity. Tax treatment across series is also unsettled in places, so series LLCs suit experienced multi-asset investors more than single-business owners who would be better served by one clean LLC.

Among the four anonymous states, Delaware and Nevada recognize series LLCs, so a founder wanting both anonymity and internal asset segregation can combine them there. Wyoming and New Mexico owners typically use separate anonymous LLCs instead. Anonymousllc.co offers a series structure as a +$150 add-on and advises whether a series or a set of standalone anonymous LLCs better fits the owner's asset mix and the states where the assets sit.