Series LLCs: Financial and Operational Flexibility Under New Delaware and Other State Laws
Advantages and Disadvantages; Formation and Governance; Drafting Strategies
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Corporate Law
- event Date
Wednesday, March 18, 2020
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will add another option to the corporate attorney's arsenal of entities to use for clients looking to limit liability, define ownership rights, and reap tax advantages: the "series LLC." A series LLC is essentially a series of separate and distinct LLCs under the umbrella of one LLC without the need to form a new LLC for each part of the "series." Because this form is complex, corporate lawyers must be familiar with all the relevant nuances.
Mr. Wolf is a partner in the Corporate and Business Department a member of the Management Committee. A native El Pasoan, he began as an associate in 1991 practicing primarily in the areas of securities, business and tax law. Mr. Wolf was promoted to partner in 1997 with practice emphasis on tax, estate and business planning.
Mr. Lehmberg's practice focuses on structuring and advising clients on issues related to LLCs, series LLCs, partnerships, trusts and S corporations. Because these entities pass their taxable income through to their respective owners, his business and tax experience also extends to advising clients on the income tax and business effects associated with the ownership of the pass-through entities.
Dr. Dacso works with healthcare organizations, hospitals, and physicians on healthcare compliance, regulations, and transactions, including physician practice formation, mergers, acquisitions, and business ventures as well as digital health and telemedicine. A Texas Board Certified Health Care Lawyer with more than three decades of experience, her practice includes the representation of nonprofit organizations such as federally qualified health centers, certified nonprofit health corporations, medical education foundations, and research organizations. She often advises on employer or retail-based clinics, joint ventures involving exempt and nonexempt organizations and addresses issues associated with governance and regulatory compliance. Dr. Dacso has written several textbooks and articles on a broad range of healthcare topics ranging from managed care to virtual practice arrangements among physician practices and previously served on the editorial board of E-Health, Law and Policy, and has been a regular contributing author of a chapter in the BNA publication of E-Health, Privacy and Security Law (multiple editions).
Series LLCs exist to remove the complications that come into play when a client chooses to form a new LLC for each asset the client possesses. When the series form is used, each otherwise independent entity resides in its own cell. Many commentators liken the series LLC concept to a honeycomb, and each cell within is but one "whole," but each part has its own walls.
The formation of a series LLC creates several challenges. First, it must be formed in one of the states that recognize the format of the entity. (Delaware and Nevada, two of the most common formation states, both do.) Second, counsel must take care to ensure that any state in which the series LLC operates will permit such operation (even if formation is not allowed).
Documentation and operation are not simple. Though there is but one entity, each cell can only maintain its separate liability shield if it remains independent of the other cells. Thus, corporate formalities must be observed on a cell-by-cell basis. Because each cell can have different ownership structures and rights, counsel must ensure that the documentation that exists meets the day to day realities of the businesses.
Listen as this cross-disciplinary panel provides detailed advice and guidance on not just these formation and operation issues, but also addresses related taxation issues.
- Legal parameters of series LLC
- Description and definition
- Available formation states
- Available operation states
- Selection of entity considerations
- Advantages
- Disadvantages
- Operational considerations
- Tax considerations
- Examples of Series LLC applications
The panel will review these and other high priority matters:
- What is a series LLC, and how does it differ from a regular LLC?
- What are the advantages and disadvantages of the LLC format?
- Are there ongoing documentation issues that must be observed?
