A series LLC in Delaware is a form of LLC that offers its owners and members unique liability and tax advantages. A series LLC is made up of a master LLC and one or more separate series LLCs that branch out from it.
It is not difficult to establish your own Series LLC in Delaware. It’s easy with our step-by-step instructions!
Identify Your Series LLC
Select a Registered Agent and submit the Certificate of Formation.
Make an Operating Agreement for a Series LLC.
Get an EIN.
An illustration of how a series L L C permits its members to split a “parent” L L C’s assets and activities into a number of “child” series.
Table of Contents
Step 1: Give Your Delaware Series LLC a Name
You should know the answers to the following questions before naming your series LLC:
What are the rules for naming an LLC series?
What are the standard name guidelines for a series LLC?
Is the name of my company accessible in Delaware?
Is my company name accessible as a URL, and if yes, how can I get it?
1. Series LLC name regulations differ per state. In Delaware, each child series’ name must include the name of the parent LLC and be distinct from the names of any other child series. Remember that you must also follow the conventional LLC name regulations.
Follow the Delaware LLC Naming Regulations:
The word “limited liability corporation” or one of its acronyms must be in your name (LLC or L.L.C.).
Your LLC’s name cannot include terms that may be confused with a government organization.
Restricted terms (e.g., bank, attorney, university) may need extra documentation and the participation of a licensed professional, such as a doctor or lawyer, in your LLC.
2. Consider the following basic guidelines for making the titles of your series more identifiable, unified, and clear:
Include the phrase “protected series” in the name of each organization.
The parent LLC should be named in a manner that differentiates it from the kid series.
Include the parent LLC’s entire name in the name of each kid series.
The name of the asset should be included in the name of the kid series. This gives the public and creditors a better view of the assets.
3. Does your company name exist in Delaware? Do a name search on the State of Delaware’s website to ensure that the name you choose isn’t already used.
Is your company’s name accessible as a URL? We propose that you investigate if your company’s name is accessible as a web domain. Even if you don’t intend to create a company website right away, you may wish to purchase the URL to prevent others from doing so.
Step 2: Select a Registered Agent for the Delaware Series LLC.
A Registered Agent must be designated for your Delaware LLC. The parent LLC’s Registered Agent must be the same for each child series.
What exactly is a Registered Agent? A registered agent is a person or corporation that agrees to deliver and receive legal documents on your LLC’s behalf. Service of process of legal action (if you are sued) and state filings are examples of such paperwork.
Who is eligible to be a Registered Agent? A registered agent must be a Delaware person or a company allowed to do business in Delaware. You may choose someone from your organization, even yourself.
Step 3: Submit your Certificate of Formation.
You must submit the Certificate of Formation with the Delaware Secretary of State to register your series LLC. This may be done in person or by mail. You simply need to submit a Certificate of Formation for the parent LLC in Delaware.
Experts advise going above and beyond Delaware’s standards by including particular series LLC wording in an amendment to the Certificate of Formation. We urge that you consult with an attorney.
The certificate of formation costs $90 to file.
Step 4: Draft an Operating Agreement for a Series LLC.
When incorporating a series LLC in Delaware, an operating agreement is necessary. The operating agreement does not need to be submitted to the state.
What exactly is an operating agreement? An operating agreement is a legal document that outlines an LLC’s ownership and running processes.
Why are operating agreements necessary? The operating agreement is essential for a Delaware series LLC because it establishes a barrier between the child series and the parent LLC. The operating agreement defines the child series’ liability limits (asset protection).
Step 5: Get an EIN
What exactly is an EIN? A corporate entity is identified by its Employer Identification Number (EIN) or Federal Tax Identification Number. Each of your series LLC’s offspring series will need an EIN.
Why do I need an EIN? An EIN is necessary for the following activities:
To establish a commercial bank account for the firm
In terms of federal and state taxation
To recruit workers for the firm
How can I get an EIN for my LLC series? The IRS does not have specific guidelines for obtaining an EIN for a series LLC’s child series. For each additional EIN, experts recommend using the name of your series LLC combined with the name of the child series.