The traditional Texas Limited Liability Company (LLC) has long been a favorite of newly formed businesses over the last couple of decades.  As of September 1, 2009, however, the Texas Series LLC was authorized as a new legal business entity that can own multiple properties and businesses separately  and legally distinct from each another.

The Texas Series LLC, like traditional Texas LLC’s, is governed by Chapter 101 of the Texas Business Organizations Code. The Texas Series LLC is a special form of a limited liability company that provides protection across multiple series, each of which is protected from liabilities arising from the other series. Each series may have different assets, economic structures, members, and managers. The profits, losses, and liabilities of each series are legally separate from the other series and parent LLC. Series LLC’s are appropriate for advanced business planning, asset protection, and estate planning.

What does this all mean? Quite simply, it’s an option worth exploring to shield your assets from your potential creditors, lawsuits, and taxes. For example, Company A is a trucking business with ten tractor trailer trucks. If only one gets into an accident, the entire company can potentially be liable in a lawsuit and all ten trucks are at risk against a judgment creditor. However, if a Series LLC is correctly utilized in the business structure, each of the ten tractor trailers can be in a separate “series,” and thus sheltered from liability.  In the same accident example, only that one truck will be potentially liable in a lawsuit since it’s part of a “series” and a creditor can only look to that “series” to satisfy a judgment.

Ivan Ramirez is a San Antonio based attorney that practices business law, estate planning, and bankruptcy. Contact him at ivan@ram-law.com.

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