Do you own multiple businesses or real estate properties in one corporation or LLC, or even under your name?  Are you aware that this type of “single-pot” practice is prone to putting all of your businesses and properties in jeopardy due to one legal liability relating to one of your business or property?  Are you currently protecting yourself, your businesses and properties by setting up a separate LLC for each of them, yet is it too complicated and expensive to maintain?  Then, the Delaware Series LLC offers you the perfect solution.

Delaware Series LLC (“Series LLC”) is an innovative form of legal entity that permits a single limited liability company (“Umbrella Company”) to own multiple subsidiary limited liability companies, each of which owns a single-asset business.  As separate and independent entities, each of these subsidiary companies is protected from legal liabilities arising out of other subsidiary companies under the same umbrella.  While providing the same security features of the traditional LLC, the Series LLC offers you more efficient and economical protection by requiring only one filing fee and one income tax return each year.  Also, effective management is made possible as Delaware law allows each subsidiary entity to have its own managers and members.

Delaware Series LLCs are not limited to Delaware.  Once created in Delaware, a Series LLC can register to do business or own property in any other state. 

Here are some of the illustrations of how you can practically benefit from setting up a Delaware Series LLC:

• Owning multiple real properties:  There is no need to set up separate LLCs for each property.  One umbrella company with multiple subsidiaries for each property will offer you the same legal protection as when setting up multiple LLCs, while saving you money and time.
  
  
• Operating business owns real estate property used in its operations:  You can set up a separate entity for the business and property under the same umbrella.  While one entity owning the property and the other acting as the operating the business, their legal liabilities are segregated from each other.  Some of the transactions between these two entities are not taxed.  There is no sales tax due on rent paid by the business entity to the real estate entity.  When assets are transferred among related businesses, there is no income tax on built-in gain or liability for real estate transfer taxes.

Though Delaware Series LLC offers many potential benefits, there are currently not many case laws regarding this relatively new form of device.  This calls for the need for an experienced attorney to guide you carefully through each step in setting up a Delaware Series LLC.  For a free consultation, please call or email us.  We are here to help you.