form a series llc in texas [Expert Advice]

Last updated : Aug 23, 2022

How do I create a series LLC in Texas?

1. Understand the Texas Series LLC.
2. Submit the Texas Certificate of Formation.
3. Submit Texas assumed name certificates.
4. Create a TX Series LLC Operating Agreement.
5. Get Federal EINs from the IRS.
6. Open bank accounts for your TX Series LLC.
7. Obtain any required business licenses.
8. File the Texas Franchise Tax.

Can you do series LLC in Texas?

The term “Series LLC” is proper for the parent or actual LLC. A Texas Series LLC can have series or units within the Series LLC framework which are called “series,” but are often referred to as “sub-series” to avoid confusion with the Series LLC.

How do you structure a series LLC?

The most common and recommended structure of a Series LLC is one which has a “master” Series LLC which names certain members in its master LLC Agreement. This is the LLC name that is on record with the State of Formation and the name listed on the Certificate of Formation.

Can I turn my LLC into a series LLC?

If you already have an existing business, it is possible to convert your LLC to a Series LLC. However, the process is different depending on which state your LLC is registered in. Different states may have slightly different terminology, requirements or fees.

Does a series LLC need its own EIN?

All LLCs are required to have an EIN — it's worth exploring whether a single EIN for your overall series LLC and the individual businesses underneath it is best, or if you should get an EIN for every business you manage.

Do series LLC have to file separate tax returns?

Series LLC tax reporting is similar to a traditional LLC. While each LLC within the series acts as a separate entity for governing and liability, when it comes to taxes, the series LLC is treated as a single entity and therefore submits just one tax return.

How much is a series LLC in Texas?

In order to create a registered series you must file a certification of registered series for each series with the Texas Secretary of State. (3) for filing a certificate of termination, $40.” The filing fee for each certification of registered series is $300.

Are series LLCs worth it?

Benefits of Series LLC's Reduced startup cost. Only one filing fee is required, and an attorney can set up the parent and cells at less cost than setting up multiple LLCs. There are still some additional documents that must be filed for the individual LLCs in the series. Protection of Assets.

What states allow series LLC?

The series LLC is different from a traditional Limited Liability Company (LLC). In fact, the series LLC is not not available in all states and has only been adopted in Delaware, Nevada, Illinois, Iowa, Oklahoma, Tennessee, Texas and Utah.

What is the difference between an LLC and a series LLC?

What Is a Series LLC? A Series LLC gives you all the same benefits as a regular LLC, but it serves as a sort of "umbrella company" with additional flexibility and protections for multiple companies or lines of business within your overall operation.

Can series LLC have different owners?

A series LLC may have different members and managers in each series. The rights and obligations of these members and managers differ from series to series. Each series may enter into contracts, sue or be sued, and hold title to real and personal property.

What is an example of a series LLC?

Series LLCs can be useful for LLCs that operate multiple lines of business or investments and want to insulate each line from risks incurred by the others. Common examples include real estate investors with several rental properties and investment firms with multiple investment strategies.

What is the purpose of series LLC?

With a Series LLC, a holding company can hold all individual businesses under a single umbrella while mitigating the risk of one business' assets being used to satisfy the debts or liabilities incurred by another of its businesses.

What is a protected series LLC?

A protected series LLC has both “horizontal” liability shields as well as the standard “vertical” liability shield. The “horizontal” shields protect each protected series (and its assets) from automatic, vicarious liability for the debts of the company and for the debts of any other protected series of the company.

What is a series limited partnership?

A series LLC is a group of LLCs which are owned in a tiered-down structure. The top tier LLC owns the lower-tiered LLCs. Each LLC has assets separate from the others, while the main LLC controls all the LLCs in the series. Each unit has its own owners (members) and is liable only for its own debts and obligations.

Does a series LLC need its own EIN Texas?

A series can obtain its own EIN if it chooses and be treated separately for federal tax purposes. A series may (but is not required) to have its own bank account. A series can (and should) operate under its own assumed name.

What is a Master LLC in Texas?

Taxes and Series LLCs in Texas A master limited liability company or series LLC is a legal entity that allows business owners to aggregate multiple businesses under one corporate umbrella. This can provide some tax advantages and simplify bookkeeping for small business owners.

Is a series LLC a holding company?

A holding company doesn't actively operate businesses—it simply exists and owns. As a series LLC, the holding company would own all of the individual series beneath its umbrella. Real estate investors with multiple properties sometimes form series LLCs to isolate liability.

Can a series LLC be an S Corp?

A Series LLC Treated as an S-corporation The shareholders of an LLC treated as an S-corporation report the earnings and losses of the S-corporation on their personal income tax returns. However, there are a few circumstances when an S-corporation may be required to pay taxes.

Does PA recognize series LLC?

The first state to permit the formation of series LLCs was Delaware in 1996, and since then 19 states, including Washington, DC and Puerto Rico, have created statutes that allow for the creation of a series LLC. California and Pennsylvania recognize foreign series LLCs but do not provide for the formation of one.

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a table in this video we need to talk

Thanks for your comment Kacy Grabauskas, have a nice day.
- Anh Witcraft, Staff Member

hi out there in youtube land i'm lauren with cadillac law i am a texas lawyer and i am here to teach you about the law specifically in texas and make it fun hopefully i am not giving legal advice in this video and nothing here should make anyone believe that we have an attorney-client related relationship not between myself or my firm or any of the viewers and of course if you have a legal issue i do want you to call my office or see an attorney just like medical go see a doctor and as always before we get into the good stuff please look down hit subscribe like if you have questions and you would put them in the comments that will help everybody learn so i would really greatly appreciate you doing that subscribing is free and it helps me grow my viewership reach more people share knowledge knowledge is power all right so today we're going to get right into the series llc so i had spoken about llc's and kind of gave an overview and drew for you uh if you remember my oh gosh i said okay my stick figure who was you you created an llc and you were selling widgets and the person got hurt so in this uh in this scenario in a series llc which is what we're going to talk about today you are not only a widget maker you are a landlord and you own these are houses again guys this is not art i am not an artist okay so bear with me these are the houses that you are investing in and so currently your houses are just in the llc a regular llc all of them and your widget business but what happens is i go into property b and i break my leg and my nose which is my favorite facial feature so it's worth a lot and i'm so upset i take you to court i get a huge judgment it was my left leg which had never been broken before and my favorite facial feature i'm getting a ton of money and now i have this judgment and i'm the judgment is against the llc not you remember we talked about the corporate bill so it's against the llc but that means i can take anything so i'm i'm taking property b i'm taking c i'm taking a and i might even own part of your widget company if i have a good attorney so how do we prevent that the series llc hold on i have to obviously i can't art okay so in the series llc you have the llc limitations to you but you're creating that llc limitation around each property so in this case the widget business is one property c is a property b is a property a is a property so the series llc basically makes it so each one of these is in its own llc but you only have to do one filing with the secretary of state so it saves you a ton of money over time and what that does in terms of when i fall in being and i get my judgment well as you can see b is stuck in this square b is stuck in the square so all you're going to be able to get is what's in the series that is included in b and in this scenario it was just the real estate in b so even though my beautiful precious nose is never going to come back all i can get is b because you had a series llc now i have to tell you and a lot of clients like oh you do have to get what you do is you get an ein with the llc through you so you're still going to have the same kind of taxation the flow through right but then each time you open a series like every property you buy or each new series that series will get an ein that flows up through this llc so it's series into llc and then llc into you so you do have to keep separate accounting for each item in the series but if you're a real estate investor and you have more than one property you should have separate accounting for those properties anyhow it's not like i'm really asking or anyone's really asking a whole lot here this is actually relatively easy and really could keep you organized and will prevent a lot of legal liability now i've had pushback from one person one time he was a lawyer in his past life and he says well the supreme court hasn't ruled on these things that is true but unlike him i see the lack of supreme court guidance as an opportunity uh it's not a risk in my mind so you go and you follow the rules about the series llc and you do it right and if you end up having to go to the supreme court you go to the supreme court i mean it's probably not going to happen but if it ever did you could then get that guidance you could also make arguments and be part of the guidance for the future in my mind that is never a bad thing all right so i recommend series llc for everybody who is an investor and i usually like to put them inside of a trust which i have another video which you can link to about trusts because they that adds additional security for you and um for the things that are in your name also it allows for the trustee to continue to manage the business if anything happens to you and you know most people who are investing in real estate are doing that for an income so certainly if something happened to you and it's in a trust and say you had a spouse that's relying on that income the trust can still do the work and can still continue to get that income for your spouse instead of putting like a full stop for probate which does happen so i hope you all have learned something today i'm a huge fan of series llc's i am not a huge fan of art well no i'm a huge fan of art i'm not a huge fan of making the art on my own i hope you forgive me and i hope you've learned something have a beautiful day

Thanks Britteny your participation is very much appreciated
- Anh Witcraft

About the author

Anh Witcraft

I've studied solid-state chemistry at Paul Quinn College in Dallas and I am an expert in physics education. I usually feel alone. My previous job was photographer I held this position for 22 years, I love talking about ultimate frisbee and swimming. Huge fan of Melissa Ordway I practice paintball and collect pin-back buttons.