There has been a lot of hype surrounding the new Series LLC laws in Missouri, but what is it and is it right for your business? In basic terms, a Series LLC creates an umbrella that shelters any number of independently operating LLCs (the “Series”) under one “Parent” LLC. However, this is a relatively new form of business ownership and deserves a closer look. Here’s how your business might benefit from a Series LLC in Missouri.
Reduced Start-Up Costs
When forming a Series LLC in Missouri only one filing fee is required. An attorney can set up the parent LLC and multiple series at less cost than setting up multiple LLCs. Once the Parent LLC is formed, the Series is easily added without limit which can greatly reduce your formation costs particularly if you have quite a few assets to protect.
Greater Protection of Assets
Speaking of protection, the assets of each individual Series can be protected from judgments against assets within other Series. For example, a real estate developer could put individual properties each into a separate Series. If there is a lawsuit is brought against one of the properties, the others can be protected.
Less Complex than Corporation/Subsidiary Structure
A series LLC in Missouri doesn’t have the same complexities of taxes, structure, and formalities as a corporation with subsidiaries. Each Series can have different ownership interests, different allocations of profit and loss and different management structure. Each can elect to be taxed differently from the other Series.
Only one tax return
As mentioned above, only the parent LLC is required to file a tax return. If the parent LLC and each Series elect to consolidate into one as a single taxpayer. However, several tax and legal implications could arise. So you will need to work with professionals who are experienced with this type of return.
Although all of these benefits sound great to keep in mind that the decision to form a Series LLC takes careful consideration. If you’re contemplating forming a Series LLC in Missouri contact LexLaunch to talk through your options and get started protecting your assets today!