The Delaware series llc—now known as a series limited liability company (or a series LLC)–was first conceptualized as a special interest legislation. It was first intended to help the industry of mutual funds forgo the need to file multiple SEC filings. The reason why it was first referred to as the Delaware Series LLC, was for the reason that, in 1996, Delaware became the first state to apply and enact the legislation. Many different states followed in the months and years thereafter including Illinois, Nevada, Tennessee, Utah, and Oklahoma.
Series LLC Explained
The advantages of a Series LLC are less inherent to the legislation and have more to do with being “better” than the alternative. The reason why many will choose to form an LLC, is in order to enable the protection of personal assets from related litigation. Theoretically, one could form a separate LLC in order to protect each individual asset from lawsuits related to the assets of an individual. That way, a lawsuit against an LLC could only pertain to the assets owned by that individual and separate LLC. This, however, would end up costing individual’s and businesses a fortune in practice. A Series LLC is a much more efficient way for businesses to protect their property and assets. With a Series LLC, the basic idea is to separate the property and assets of an LLC into separate cells or divisions. This way, in the case of liability, the different cells will be subject to their own separate liabilities without endangering the other assets of the business. However, businesses only have to pay the one annual rate and file much simpler tax forms.