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Thoughts on Delaware Series LLC


Is anyone using this kind of LLC and willing to share their experience?

My husband and I haven't set up our LLC for real estate yet and in talking with the attorney, he brought up the Delaware Series LLC. We currently invest of out state and plan on continuing investing in 2-3 additional states. One downside is that there isn't any case law or court decisions interpreting the Series LLC yet. That may have changed since we last talked to him, so I am not sure.

We currently own property so I am anxious to get it transferred into a LLC. From what I understand, we can still do a normal LLC and then change it later so there is no real hurry to have a Series LLC. Just looking for input.

Diane Kennedy

Bronze Contributor
Other states offer the Series LLC, you don't have to go with Delaware. In fact. if you aren't going public,I think you're better off off with a series LLC in NV. Delaware has too many fees.

Check to see if the state in which you have your property recognizes the Series LLC, you'll have to have it authorized in the state in which the property is.

Megan H

New Contributor
Chiming in here - the only states that recognize Series LLCs are Delaware, Ilinois, Iowa, Nevada, Oklahoma, Tennessee and Utah. So if you had a cell holding property in Kansas or something, and it got sued, the argument would be that Kansas would treat your whole LLC as one entity - meaning all the assets are potentally at risk.

The other thing with Series LLCs is that they don't really save you any money. To stay safe (at least according to attorneys I've bounced this around with) you'll need to keep separate business records and separate bank accounts. Those records all get consolidated into a single tax return at the end of the year -which could wind up taking more time and costing more $$ than if you just did straight standalone tax returns.

The other thing to consider is that you live in CA - which takes the position that all cells in a Series LLC should pay the $800/year franchise tax. So if you've got RE in CA and use a Series LLC cell to hold that property ... you could wind up paying more than necessary.

Just my $0.02. Good luck with it!

Megan H