If you are a business owner who wants to protect your assets and limit your liability, a series LLC might be the right choice for you. A series LLC is a type of limited liability company that allows you to create multiple “series” within one LLC, each with its own assets, liabilities, and members.
To form a series LLC, you will need to file articles of organization with your state`s secretary of state and create an operating agreement. An operating agreement is a legal document that outlines the rules and regulations for how the LLC will be managed and operated.
One important aspect of the operating agreement for a series LLC is the inclusion of a series provision. This provision outlines how the individual series within the LLC will be structured and managed. It typically includes provisions for the creation, management, and termination of each series, as well as rules for how the assets and liabilities of each series will be treated.
If you are considering forming a series LLC, it is important to draft a comprehensive operating agreement that includes a series provision. This will help ensure that each series is properly structured and managed, and that the assets and liabilities of each series are kept separate from those of the LLC as a whole.
One key aspect of a series LLC operating agreement that many business owners may overlook is compliance with the Securities and Exchange Commission (SEC). Depending on the nature of your business, you may be subject to SEC regulations and requirements. It is important to consult with a legal expert who is experienced in both series LLCs and SEC compliance to ensure that your operating agreement is in compliance with all applicable laws and regulations.
To summarize, if you are considering forming a series LLC, make sure you create a comprehensive operating agreement that includes a series provision and complies with all applicable SEC regulations. This will help ensure that your LLC is properly structured, managed, and protected, and that your business is in compliance with the law.