What is it?
The Texas Series LLC is a special form of a limited liability company that provides liability protection across multiple series, each of which is theoretically protected from liabilities arising from the other series. Essentially, a Texas Series LLC contains one or more subsidiary LLCs set up under the one parent LLC; comparable to structure of a corporation with several subsidiaries. The Texas Series LLC is essentially a single umbrella entity that has the ability to partition its assets and liabilities among various sub-LLCs or series. Each sub-LLC may have different assets, economic structures, members, and managers. The profits, losses, and liabilities of each series are legally separate from the other series.
Example
For example, Parent LLC has three series: A, B, and C. As long as each series “(1) has separate rights, powers, or duties with respect to specified property or obligations of the limited liability company or profits and losses associated with specified property or obligations; or (2) has a separate business purposes or investment objective” only the liabilities of A can be enforced against the assets of A, only the liabilities of B can be enforced against the assets of B, and only the liabilities of C can be enforced against C. The liabilities of one particular series can not be enforced against the assets of one of the other series or Parent, LLC.
Why use a Texas Series LLC?
Series LLC’s are ideal for the advanced planning of complicated business arrangements commonly found in hedge funds, venture capital funds, oil and gas deals, real estate projects, and fractional share arrangements. One major benefit of setting up a Texas Series LLC is that you only incur one state filing fee for the parent LLC, no matter how many series the parent LLC has. By separating the assets and liabilities of each series, you can avoid many of the inefficiencies and costs associated with multiple related entities. For example, a series LLC could be used to hold multiple parcels of real estate, each in a separate series and all within the one parent LLC. In another example, separate divisions of a business could be held by one LLC, with each division in its own separate series.
Where did it come from?
The Texas Business Organizations Code (TXBOC) – Subchapter M – Sections 101.601 through 101.621 created a new Texas entity type known as a Texas Series Limited Liability Company or Texas Series LLC. Nationwide, the concept of the Series LLC is relatively new and untested, having first appeared in Delaware in 1995. Here in Texas, the Series LLC was just passed by the Legislature in the 2009 session (Senate Bill 1442).
Justin Copeland is a corporate transactional lawyer who enjoys representing businesses and individuals in a variety of transactional matters. He can assist you in any stage of the process, from formation, seed and venture financing, franchising, mergers and acquisitions, to business purchase and sales transactions. He also advises clients on a broad range of business matters, including contracts, real estate transactions, employment matters, internet law, and intellectual property (copyrights, trademarks, and trade secrets). His clients include companies in the software, technology, energy, real estate, insurance, healthcare, manufacturing, construction, advertising & marketing, and retail sectors. He is now "Of Counsel" to Whitehouse Law, PLLC. 
