What Is Series LLC?
A Series LLC lets you hold multiple properties in separate liability cells under one parent LLC. Each series operates like an independent LLC—its own assets, its own liability shield—but you file once and pay one set of annual fees. Form 10 separate LLCs in Texas and you're looking at $3,000+ in formation and $750/year in franchise tax. One Series LLC with 10 series? $300 formation, $0 franchise tax (Texas exempts Series). The catch: interstate recognition is murky—some states don't recognize series liability isolation. Use it when you're scaling fast in a Series-friendly state. Under 10 units? Hub-and-spoke is usually simpler.
A Series LLC is one parent LLC that contains multiple "series" (cells)—each with its own liability protection, assets, and members—like a honeycomb. One filing, multiple protected compartments. Available in roughly 20 states including Delaware, Texas, Illinois, Wyoming, and Nevada.
At a Glance
- One parent, many series — each series holds assets and has separate liability protection
- Cost savings — one formation fee, one annual report; no per-property LLC filings
- ~20 states offer it — Delaware, Texas, Illinois, Wyoming, Nevada, Iowa, Tennessee, Utah, and others
- Interstate recognition — unclear whether a Texas series is recognized in Ohio if you hold property there
- Bankruptcy isolation — courts haven't fully tested whether one series' bankruptcy affects others
How It Works
The honeycomb structure. You form one parent LLC—e.g., "Smith Properties LLC" in Texas. Under that parent, you create series: Series A, Series B, Series C. Each series has its own operating agreement, its own assets (one property per series), its own liability. A lawsuit on the property in Series B targets only Series B's assets. Series A and C are untouched. You're not forming 10 separate entities. You're creating 10 cells under one roof.
Filing and fees. The parent LLC files articles of organization. You add a series by amending the operating agreement or filing a series designation—depending on the state. Texas: $300 formation for the parent, $0 for each series. Annual franchise tax: $0 for most Series LLCs (Texas exempts them). Compare that to 10 traditional LLCs: $300 × 10 = $3,000 formation, plus $750/year franchise tax (assuming $75 per LLC). The savings add up fast.
The interstate problem. You form a Series LLC in Texas. You buy a property in Ohio. Does Ohio recognize that Series A's liability is isolated from Series B? Ohio doesn't have a Series LLC statute. Some attorneys say yes—the formation state's law governs. Others say no—the property state might treat the whole parent as one entity. No clear case law. If you're multi-state, hub-and-spoke with separate LLCs per state is often safer. See the Legal Protection guide for structure decisions.
Real-World Example
Marcus: 10 properties, Texas Series LLC vs 10 separate LLCs.
Marcus holds 10 rentals in Texas. Option A: 10 separate LLCs. Formation: $300 × 10 = $3,000. Registered agent: $100/year × 10 = $1,000. Franchise tax: ~$75 × 10 = $750. Year one: $4,750. Option B: One Series LLC with 10 series. Formation: $300. Series designations: $0 (operating agreement amendment). Registered agent: $100/year for the parent. Franchise tax: $0 (Texas exempts Series LLCs). Year one: $400. Marcus saves $4,350 in year one and every year after. He's all-Texas—no interstate issue. For him, Series LLC is the right call. If he added an Ohio property, he'd form a separate Ohio LLC for that one—hub-and-spoke for the outlier.
Pros & Cons
- Massive cost savings — one formation, one annual report, one registered agent
- Liability isolation — each series protects its assets from claims against other series
- Scalability — add series without new state filings; ideal for 10+ units in one state
- Charging order — charging-order protection applies at the series level in Series-friendly states
- Operational simplicity — one EIN for the parent (or per-series, depending on structure); fewer bank accounts to manage
- Interstate recognition — unclear whether non-Series states respect liability isolation
- Bankruptcy uncertainty — if one series goes bankrupt, can creditors reach other series? Courts are still deciding
- Lender hesitation — some banks and commercial lenders don't understand Series LLCs; you may need to explain or use traditional LLCs for financed properties
- Complexity — operating agreements must clearly separate series; sloppy drafting weakens the shield
Watch Out
Don't use Series LLC for multi-state without counsel. Holding a Texas Series LLC's property in Ohio? Get an attorney who understands both states. The "which law governs" question has no clean answer. When in doubt, use separate LLCs per state—hub-and-spoke with a Wyoming holding company and property-level LLCs in each state where you operate.
Series LLC vs hub-and-spoke: match your scale. Under 10 units, especially if you're in one state? Hub-and-spoke is simpler—one Wyoming holding company, one LLC per property. Over 10 units in a Series-friendly state? Series LLC starts to make sense. Rapid scaler buying 2+ properties a month? Series LLC saves time and money. See the Legal Protection guide for the full decision framework.
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The Takeaway
A Series LLC is a cost-efficient way to hold multiple properties with liability isolation when you're scaling in a single Series-friendly state. One filing, many cells. Texas, Delaware, Illinois, Wyoming, Nevada—all offer it. The fee savings vs 10 separate LLCs can exceed $4,000/year. But interstate recognition and bankruptcy isolation are still evolving. Multi-state? Stick with hub-and-spoke. Single-state scaler? Series LLC is worth a close look. Pair with charging-order protection by forming in Wyoming or Nevada if you want the full fortress. For how Series LLC fits into a multi-state entity strategy, listen to the Multi-State Asset Protection episode.