Nevada Series LLC
The Series LLC is a new type of business entity that 5 States have adopted thus far. (Nevada, Delaware, Oklahoma, Iowa & Illinois)
The Series LLC allows a person to form 1 LLC (the parent LLC) and maintain several cells under this LLC. Each cell can be maintained seperately thus effectively producing multiple LLC for the cost of 1. Take for example a Landlord in CA with 5 rentals. For each of his/her rentals they would form a seperate LLC to protect each property. The costs would be as follows: $500.00 (formation fee) plus $800.00 (franchise fee) for a cost of $1,300.00 per company. That is a total cost of $6,500. This does not include accounting fees, bookeepers etc.
With the Series LLC you would only need to form the parent LLC and put each rental home into a cell or seperate series (ie: siries 1, series 2 or series a, series b etc). Each cell needs to be operated as a seperate business enterprises. Each cell (series) should have its own bank account, dposits, rental agreements etc. All paperwork should have the series distinguished so that it is operating as that series and not the parent LLC. At the end of the year all of the seperate cells accounting will be brought together for 1 tax return.
Because the LLC was registered in another State all States will allow it to foreign qualify in their State. This will allow you to operate as a Series LLC in States where it has not been adopted by law.
- Significant cost savings
- 1 tax return instead of many
- Multiple business or properties to protect
- Seperates assets while maintaining protection
Things to do to ensure that each series is separate:
- Separate bank account.
- Clearly distinguish each series from the others (ie: series1, series 2 etc)
- Sign a separate Operating Agreement for each series