Three Best Series LLC Businesses for Illinois | Gardi & Haught, Ltd.

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Three Best Series LLC Businesses for Illinois

Three Best Series LLC Businesses for Illinois

By Marta Truskolaksa

Unlike many other areas in the country,  businesses in Illinois can lawfully establish a Series LLC. Series LLCs offer the flexibility of a partnership with the protection of an LLC. With a Series LLC formation, businesses can establish a series of LLCs under a Master LLC which provides many benefits including considerable savings in administrative fees, liability protection and “pass through” taxation.

Each business in the “series” shares profit and loss but maintains separate operational functions including separate EINs, bookkeeping, recordkeeping and membership. Series LLCs are ideal for businesses or individuals that own and operate multiple  properties and want to keep their businesses separate but share profit and loss.

Series LLC formations offer advantages for any business in any industry. However, at Gardi & Haught, we find the Series LLC particularly attractive to businesses in three major industries:

Property Managers. The Series LLC is a favorite among property managers who own several apartment buildings, condo complexes, etc. In these cases, if one property fails, the other properties in the series are insulated from financial and legal liability because of their establishment as totally separate LLCs. Creditors are unable to collect on the debt of the failed entity from the healthy ones and lawsuit judgements will only affect the entity in question.

Real Estate Developers. Real estate developers may want to separate their developments under a Series LLC. In addition to the advantages offered the property managers listed above, the Series LLC gives the real estate developer the flexibility to add additional Series as their developments reach various stages. Then, a real estate law firm like Gardi & Haught can help businesses add to, delete or modify their current operating agreement to include new entities. Working off a single operating agreement and amending it to include the Series is the most cost-efficient way to convert a single LLC to a Series.

Franchises. The Series LLC offers the obvious flexibility of adding entities under the Master LLC umbrella as the franchisor adds locations of his business. When we meet with franchisors looking to secure their first location, we encourage them to establish a Series LLC right away. That way they will be able to easily keep their future locations separate but operated under the Master LLC.

In the state of Illinois, the Secretary of State recently reduced the administrative fees for setting up a Series LLC which makes it even more attractive to businesses.

At Gardi & Haught, we are well-versed in the reasons for and advantages of the Series LLC  in Illinois. Is it the best choice for your business? Call us to find out or request a free case evaluation below.

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