Thinking about forming an LLC? Consider forming a Texas series LLC. Texas is one of only eight states that offers this, and it is a wonderful tool that prevents the need for the formation of multiple LLC’s. It is especially handy if you are interested in holding different types of properties.
For instance, instead of having to form an LLC for each property, with a series LLC, you can hold each property distinctly separate from each other in one LLC. So, let’s say your LLC is called “My, LLC.” You may then hold property #1 in “My, LLC, A,” property #2 in “My, LLC, B,” property #3 in “My, LLC, C,” and so on. This allows the liabilities of each property to remain insulated from the others, so if one property were to go into foreclosure, the other properties would be protected. If all of the properties were instead held under one LLC, that foreclosure would affect the other properties, even if they were successful in their own right. Alternatively, using the series LLC prevents the headache of having to form an LLC for each property.
Series LLC’s are a great tool provided by the Texas Legislature, and they are worth a look if you are considering forming an LLC. Remember, you should always get advice from both a tax professional and an attorney prior to forming any business to determine the tax implications, and to select the correct form of business for your needs.
*Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.