Texas entrepreneurs have two (2) options when choosing a form of Limited Liability Company (LLC):
- The first option is a “traditional” LLC;
- The other option is a Series LLC
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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