WHAT IS A NEVADA SERIES LLC?

Nevada is one of the only states in the United States to allow businesses to operate under an organizational structure known as a "Series LLC." A Series LLC is an ideal structure for the ownership of income producing real estate holdings, such as rental properties. In forming a Series LLC, the organizer files only one set of Articles of Organization to establish a master or "mother ship" limited liability company. So long as the Articles and Operating Agreement provide for the establishment of a series under the mother ship LLC, as allowed by Nevada statutes, the organizer can then establish cells or "series" underneath the mothership within which to hold assets.

For example, the organizer establishes "Anybiz, LLC," which under its Articles and Operating Agreement allows for the creation of series within its structure. Anybiz, LLC then purchases three (3) rental properties and title is taken to each property in the names of Anybiz, LLC Series 1; Anybiz, LLC Series 2; and Anybiz, LLC Series 3 respectively. So long as each series is governed by its own Operating Agreement and is treated by membership and manangement as separate and distinct business entities, the liabilities of one series will not infect the others. Series LLC's reduce costs in allowing for the formation and maintenance of only one LLC with the Nevada Secretary of State (and therefore the payment of formation and annual renewal fees for only one LLC) while providing the limited liability benefits of multiple LLC's. Under the right circumstances, the series LLC may have to file only one federal income tax return as well.

Series LLC's are yet another component of Nevada's pro-business arsenal and favorable corporate climate. In order to benefit fully from this unique business structure, however, it must be formed correctly. Consult with your Nevada business lawyer to ensure proper formation and operation of the Nevada Series LLC.

Disclaimer: This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. If you have questions or need specific advice relating to the matters contained herein, please contact Lovaas & Lehtinen, P.C.