The Texas Series LLC: An Ideal Entity Structure for the “Serial Entrepreneur”

Texas entrepreneurs have two (2) options when choosing a form of Limited Liability Company (LLC):

1. The first option is a “traditional” LLC;
   
   
2. The other option is a Series LLC
   
   

A traditional LLC is composed of a single business entity, for example, Acme, LLC.  It would be possible for Acme, LLC to obtain, and do business under, various assumed names (e.g., “doing business as” or simply “dba”).  Thus, for example, Acme, LLC might do business under one or more assumed names, such as: The Acme Widget Company, LLC; or in the case of an LLC that is used to hold title to real property, The 1234 Main Street, LLC; and the like.

With the traditional LLC structure, Acme, LLC and each “sub-business” — Acme Widget Company, LLC, The 1234 Main Street, LLC, and so forth, would be treated for purposes of civil liability as a single unit.  In other words, Acme, LLC would be liable for the debts and other legal obligations of both The Acme Widget Company, LLC and The 1234 Main Street, LLC.  Furthermore, The Acme Widget Company, LLC and The 1234 Main Street, LLC would both be liable for the debts and other legal obligations of each other, as well as for the debts and other obligations of Acme, LLC.

A Texas Series LLC, on the other hand, although at first glance appears to be structured in much the same way as a traditional LLC, creates a legal separation between the “parent” LLC, Acme, LLC in our example, and each of the “sub-businesses,” The Acme Widget Company and The 1234 Main Street, LLC, in our example.

Thus, with a Texas Series LLC, neither the “parent” LLC, nor any of the “sub-businesses” are liable for the debts or other legal obligations of each other.

As with all legal matters, there is no “one-size-fits all.”  Thus, although a Texas Series LLC is not the appropriate choice for all situations, Texas “serial” entrepreneurs might at least want to consider the option prior to organizing their next new business entity.

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Disclaimer

The information contained in this publication is provided by Lapin Law Group, P.C., for informational purposes only and, shall not constitute legal advice or create an attorney-client relationship.  The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction.  Do not rely on the information contained in this publication for any purpose.  If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.

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