A series LLC in Texas is a form of LLC that offers its owners and members unique liability and tax advantages. The series LLC is made up of a master LLC and one or more sub-series that branch out of it.
It is not difficult to establish your own Series LLC in Texas. 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.
Step 1: Create a company name for your Texas Series LLC.
1. Series LLC name regulations differ per state. When name your series LLC in Texas, you are just obliged to follow typical LLC naming restrictions. For each kid series, you must additionally submit an assumed name certificate.
Follow the Texas 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 the name exist in Texas? Check the Texas Comptroller of Public Accounts website to see if the name you desire isn’t already taken.
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 Texas Series LLC.
You must choose a Registered Agent for your Texas series 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 Texas citizen or a company allowed to do business in Texas. You may choose someone from your organization, even yourself.
A Registered Agent in Texas must agree to appointment in writing or electronically.
The following information should be included in the consent statement:
Your series’ LLC name and all child series’ names
An explicit declaration that the person specified agrees to act as the series LLC’s registered agent.
The person chosen as the registered agent’s name
The registered agent’s signature
The execution date
It is not necessary to submit the consent statement with the Secretary of State. View the Acceptance of Consent Form 401-A for more information on this requirement, as well as a fillable consent form.
Step 3: Submit your Certificate of Formation.
You must submit the Certificate of Formation with the Secretary of State to register your series LLC. This may be done online or in the mail.
The key to forming a Texas protected series LLC is to establish a legally compliant Certificate of Formation and Operating Agreement.
The Texas Secretary of State’s Certificate of Formation form has a “supplemental provisions/information” field for your series LLC details. If more room is required, you or your attorney may insert an amendment.
We suggest collaborating with an attorney to draft your Certificate of Formation.
The master LLC’s Certificate of Formation costs $300 to file. The kid series has no extra cost.
Step 4: Draft an Operating Agreement for a Series LLC.
When founding a series LLC in Texas, 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 Texas series LLC because it establishes a barrier between the child series and the parent LLC. The operating agreement defines the kid series’ responsibility 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 precise procedures for obtaining an EIN for a series LLC’s child series. For each subsequent EIN, experts recommend utilizing the name of your series LLC coupled with the name of the child series.