As specialists in incorporating services, today we conclude our quick two part series about, well Series LLCs, by focusing primarily on a popular State to incorporate in: Delaware.
Last week we went over the fact that when the series LLC (or cells) do business or when they take title to properties, the names are listed as ‘XYZ Investments LLC, series 1-10′.They never lose the name of the LLC filed with the Delaware Secretary of State. Additionally, the Series LLC has only one Delaware ‘annual report fee’ regardless of how many series it contains. The Delaware series LLC enables operations to be managed under one roof.
Even more interestingly, the series LLC does not have its own chapter in the Delaware code, like limited partnerships do; instead, most of the provisions are squeezed in just one section of the Delaware LLC Act (6 Del. C. Section 18-215 if you are curious). Therefore at its core all of the other Delaware LLC Act provisions apply to the series, but there are a number of innovations that allow this entity to multiply internally to have an unlimited number of “tentacles”, each with a separate purpose and separate assets and liabilities. This is like a blank check from the Secretary of State, empowering you to create as many entity-like cells under this one umbrella without any additional state filings.
In a chat with a friendly clerk at the Delaware Secretary of State this week we learned that communicating the “birth” of different cells is not required. As a matter of fact even the articles of organization do not include a particular area or check box to signal the fact that a certain entity is indeed a Series LLC. According to this clerk, as long as the incorporator makes a note in Article Fourth of the articles (the one where members can add comments or “any other matters the members determine to include herein”) that the new LLC is a Series LLC, that’s pretty much the extent of the legal obligations with the State of Delaware.
The Document People is a network of legal document assistants, paralegals and notaries. We offer Delaware incorporating services in Los Angeles County and Orange County at the We the People Woodland Hills, We the People Santa Monica, San Fernando, We the People Glendale and at The Document People Torrance, Anaheim and Oceanside stores.
The information contained in this blog – including information of a legal nature – is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
