Menu

Are You a Serial Entrepreneur? Consider the Delaware Series LLC.

By IncNow | Published October 6, 2015

series llc egg cartonSerial entrepreneurs should consider the Delaware Series LLC, the most cutting-edge type of business on the market.

While it is advisable to set up a new LLC for each different business interest, if the cost of managing a dozen or more companies is overwhelming, consider another alternative: the Series LLC. Are you someone who is regularly thinking of and exploring different business ideas to determine the viability of a product or service in the market? The Series LLC may be the business incubator you need to provide some shelter and separation between each business idea. Or perhaps you own multiple real estate investment properties, but you have been meaning to separate them out, without the need to establish and maintain separate companies.

Introduced in 1996 in the state of Delaware, the Series LLC offers the same benefits as a traditional LLC with one, significant difference. A Series LLC can establish under that umbrella an unlimited number of self-contained protected cells. Under Delaware law, each protected cell is given protections almost like separately incorporated subsidiaries.

Why a Series LLC?

For an entrepreneur who has multiple business pursuits or who owns multiple real estate investment properties, each product, service or property can be segregated into its own protected cell. A claim arising out of any one property, product or service should not allow that creditor or claimant to reach the assets of any other protected cell. If all properties, services and products were in a single traditional LLC, all would be at risk for a claim arising out of any one property, service or product. With a Series LLC, all of your eggs are still in one basket, but there is some separation between them, like in an egg carton to keep the eggs from breaking at once.

What are the other advantages?

There are clear cost and administrative efficiencies by establishing a Series LLC to segregate real property and businesses into their own protected cell within a Series LLC for asset-protection purposes when compared to the cost of establishing separate, multiple traditional LLCs for each property or business.

A Series LLC only pays one franchise tax fee and one registered agent fee no matter how many protected cells it creates. There is no cost to add protected cells or limit on the number of protected cells under the Series LLC. Because the LLC operating agreement is allowed maximum freedom of contract when drafting, the limit is your imagination.

How do I get started?

IncNow has set up more than 1,000 Series LLCs over the past 12 years. IncNow is an attorney-managed business in Wilmington that has been helping entrepreneurs, start-ups, law firms, incubators, accountants and businesses start Delaware LLCs and corporations since 1974. President John Williams, an attorney with extensive experience in LLCs, said they prepared their first Series LLC around 2002. Since then, their popularity has grown. “We are contacted by a lot of entrepreneurs and we are doing it at a very affordable price,” says Williams. They even registered the domain www.SeriesLLC.com.

To this day, IncNow makes it easy for entrepreneurs to incorporate. IncNow gives lawyers and accountants “signature ready” documents for their customers. IncNow does not use blank form documents. Instead, IncNow’s documents, such as Series LLC operating agreements, are filled in and ready for signature with the principals’ names and business name already in the document. You can then add as many protected cells as you wish without incremental fees.

IncNow remains an attorney-operated incorporation service that’s small enough to care and big enough to count on.

Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

When deciding where to form your company, consider that Delaware has advantages over your home state that may benefit you. Go