A series LLC is a single entity that allows creation of separate "series," each with its own assets, liabilities, and members that are legally isolated from the other series. This structure is popular with SPV syndicators doing multiple deals because you form one entity and then add series for each deal rather than forming a new LLC each time.
Benefits:
- Lower formation costs for high-volume SPV operators
- One annual report and one registered agent for the master entity
- One master operating agreement with series supplements rather than separate documents per deal
Drawbacks:
- Many banks will not open separate accounts for individual series
- Not all states recognize series liability shields
- Tax treatment remains unsettled in some jurisdictions. The IRS has not issued final guidance on whether each series is a separate entity for federal tax purposes, though most practitioners treat them as such.
A series LLC is not appropriate for traditional blind-pool funds, where the LP structure and carried interest mechanics of a limited partnership are standard.
See Series LLCs for SPVs for a full analysis.
This content is for informational purposes only and does not constitute legal, tax, or compliance advice. Consult qualified counsel for guidance specific to your situation. Capital Company is not a law firm and does not provide legal advice.