DOES MY BUSINESS SUIT A NEVADA SERIES LLC?

This blog has previously addressed the Nevada Series LLC, a unique type of business entity that affords limited liability protections to sub-entities (or series) under the umbrella of singular Secretary of State filings by the “mothership” entity. As previously described, Nevada is one of a very few states in the country that allows the formation of the Series LLC. That being said, what types of businesses are appropriate for the formation of a Series LLC? Typically, the Series LLC is ideal for holding companies – especially for real estate holdings. Under these circumstances, an entity that owned five (5) real estate parcels could form a Series LLC, placing each parcel in its own series, thereby providing limited liability protection per parcel. For example, if someone was injured on parcel 1, that party’s remedy would be against the series that owned parcel 1, rather than against the umbrella entity. In other words, although the five (5) parcels all fall under the singular Secretary of State filings of the umbrella entity, the injured party cannot look to the other four (4) parcels as assets from which a judgment might be satisfied.

There may be other business types suitable for the use of a Series LLC as well. As always, it is best to consult with your Nevada business attorney prior to making the entity formation choice.

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.

WHY IS IT IMPORTANT TO KEEP MY NEVADA CORPORATION OR LLC IN “GOOD STANDING?”

Global Business Lawyers’ Blog has previously featured information regarding the importance of a Nevada entity using a business lawyer as its registered agent. These reasons include prompt notification and consultation or referral in the event the entity is served with a summons and complaint, or subpoena in litigation. While commercial registered agent or corporate services firms will forward information received as a conduit to the entity itself, the legal analysis is absent unless a business lawyer is the one with initial receipt.

While one may think that the simple task of notifying the Nevada entity’s principal(s) of renewal fees and forms that are due is more economically handled by a corporate services company, consider the advice the entity may need if the filing deadlines are missed and the corporation, LLC or other entity falls into "default" or, eventually, "revoked" status with the Nevada Secretary of State. Unlike a corporate services firm, a Nevada business lawyer will be able to advise the entity client that maintaining its good standing has a direct impact on whether the entity has the legal ability to participate in litigation in Nevada at all. Indeed, a Nevada entity in default status (for something as simple as a neglected renewal deadline) loses its legal ability to prosecute and defend a law suit. Additionally, the Court’s scrutiny of the entity in the face of adverse claims for disregard of the corporate entity or “piercing the corporate veil,” to obtain the personal liability of the entity’s principal(s), becomes harsher when the entity in question has failed to maintain its good standing.

Global Business Lawyers routinely advises its corporate clients in these matters and, if necessary, vigorously defends corporate clients in litigation in the face of such claims as described above. Obviously, the preference is for the entity not to be in that position in the first place. Competent advice from a Nevada business lawyer can achieve that – the mere forwarding of mail by a corporate services firm cannot.

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.