The Series Limited Liability Company in Delaware
It is generally good practice to segregate assets with high potential liabilities from other, more stable assets. Usually this can be accomplished by isolating such assets in their own entity.
One other means of achieving this with a much lower recurring overhead is by use of the Series LLC in Delaware. Section 18-125 of the Delaware Limited Liability Company Law, titled Series of members, managers or limited liability company interests - provides for the creation of Series LLCs.
The series of members, managers or interests are provided for in the Certificate of Formation and separate and distinct records and accounting must be kept for each such series and great care must be taken in the drafting of the limited liability company agreement. The effect is that none of the debts, obligations or expenses of one series can be enforced against the assets of another series.
This can also be a useful entity where there are strict licensing or capital obligations. These types of entities have been used with great effect in the offshore world in jurisdictions such as the Cayman Islands or Bermuda with similar entities known as Protected Cell companies or Segregated Portfolio companies. Suitable in the insurance and mutual fund industry, these companies have given birth to the "rent-a-captive" phenomenon.
The Delaware Series LLC can be particularly cost-effective with formation costs no greater than the ordinary LLC.
More
information can be found by visiting
our website at www.ibcf.com,
or by emailing us at clientsupport@ibcf.com.
Previous
issues of the IBCF Newsletter can be
found at: http://www.ibcf.com/news/newshome.php
About
IBCF:
International
Business Company Formation, Inc. assists
legal professionals with company formation,
both internationally and offshore, and
with registered agent and corporate
document retrieval services throughout
the world.
International Business Company Formation
is an affiliate of National Registered
Agents, Inc., a fully licensed professional
Registered Agent for thousands of business
entities, large and small, throughout
the entire United States.
International
Business Company Formation, Inc. is
located in the historic district of
Tappan, New York, approximately thirty
minutes from midtown Manhattan.
International Business Company Formation,
Inc.
101 Main Street, Suite One
Tappan, New York 10983
Toll Free: 888-664-6263
Phone: 845-398-0900
Fax: 845-398-0808
www.ibcf.com
