A series LLC in Indiana is a form of LLC that offers its owners and members unique liability and tax advantages. The series LLC is made up of a master LLC and one or more sub-series that branch out of it.
To make it easier for new business owners to figure out if they need a series LLC, we’ve compiled a guide on how to start one in Indiana that covers common questions.
- Name Your Series LLC
- Hire a Registered Agent
- File the Articles of Organization
- Draft Your Operating Agreement
- Get an EIN for Each Series
- Open Separate Bank Accounts
- Follow Formalities
Keeping finances separate preserves limited liability protections, so it’s crucial for each series to have its own bank account.
Currently, the following states recognize the Series LLC structure: Alabama, California, Delaware, District of Columbia, Illinois, Iowa, Kansas, Missouri, Montana, Nevada, North Dakota, Oklahoma, Tennessee, Texas. Regulations for Series LLCs vary by state. Closely follow Missouri regulations when starting and operating a Series LLC.
Statutory References for Series LLC
Section 1: 17-76,143(a) and 347.186.1 – the Operating Agreement. The first section of each state’s series LLC law has four things. First, it allows current and future series establishment within the LLC. Second, it allows "designated series" of members, managers, or LLC interests. Third, each "designated series" can have separate rights, powers, or duties regarding a property, obligation or profits.
Each series within your Series LLC must have its own bank account, since each produces separate financial statements. An LLC creates a boundary between owner and company, legally protecting the owner from company debts or liabilities.
Each series operates like a separate entity with a unique name, bank account, and books. A series LLC may have different members and managers per series. The rights and obligations of these members and managers differ by series. Each series can enter contracts, sue/be sued, and hold property title.
The Series LLC provides individualized liability protection to sub-companies (series) under one larger company. It allows creating multiple series under a parent LLC to separately hold properties without fully forming/maintaining additional LLCs. Cost savings and flexibility make the series LLC structure attractive for real estate buy-and-hold investors.
Despite attractiveness, use is best limited to single-family investments. Commercial or multifamily investments should have their own LLCs. If entirely risk-averse, individual LLCs per property is more conservative, albeit costlier.
Only certain states allow series LLC formation: Delaware, Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas, Utah and Puerto Rico.
If you operate businesses throughout several different states, check state laws to make sure each state in which you do business recognizes series LLCs. Going forward, make sure to maintain wholly separate and accurate accounts for each individual LLC.
The Series LLC can help organizations protect their assets from liability, and in many cases can do so with less expense and more flexibility than other structures that mitigate liability risk like the holding company or parent-subsidiary structures. The Series LLC was initially pioneered by Delaware, a famously pro-business state.