Q: What is a Series Limited Liability Company (Series LLC)?
A: A Series LLC is a company created and formed under state statute that is similar to a regular LLC. The difference is that assets are placed into series for the purpose of gaining additional liability protection. They are only available in a limited number of states, but are gaining momentum in their popularity.
Q: Can I convert my regular LLC into a Series LLC?
A: Yes and no. From a legal standpoint, you cannot change the form of your company from an LLC to a Series LLC directly. If you want to make such a transformation, a Series LLC must be formed separately and independently. From that point, the assets can be transferred from the old LLC to the new Series LLC.
Q: What is the IRS’s position on the Series LLC?
A: Generally, the Series LLC is recognized by the IRS as a legitimate entity. Tax returns will be filed according to the appropriate elections made by management and their counsel.
By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors