One of the frequently asked questions we get by real estate investors about setting up a series LLC in Texas is how to name the LLC and each of the individual series.
Some attorneys recommend using “Series 1” or “Series A” but we suggest a different approach. The biggest problem with using the alphabet is that you do not have an infinite number of letters available to you (and we have worked on series LLCs with more than 26 individual series). And the biggest problem with using numerals is that you can’t readily identify the asset any given series holds.
The first step in naming any entity in Texas is to run a preliminary name availability check with the Texas Secretary of State. This is done by simply contacting the Texas Secretary of State’s New Filings Team at (512) 463-5583 and asking the agent if your preferred name is available. If it is then you have two options: (1) do nothing and hope it (or something similar) isn’t used between now and the time you file your certificate of formation, or (2) file a name reservation form (and pay a $40.00 fee). [Note: a name reservation is only good for 120 days from the date of filing the reservation form.]
Once you have filed your certificate of formation and the Texas Secretary of State has issued you a certificate of filing you are set to establish your first series. To do that, you must properly document the creation of each series in your company records (that a topic for another blog post) and file an assumed name certificate with the Texas Secretary of State (along with the $25.00 filing fee).
We suggest that the best practice for naming your individual series is to name each one after the property address or the trade name of the property each individual series holds. For example, if you own 4 properties in 4 individual series then each should be named as follows:
123 Main Street, an individual series of ABC Co., LLC, a Texas series limited liability company
456 Main Street, an individual series of ABC Co., LLC, a Texas series limited liability company
Trade Name Apartments, an individual series of ABC Co., LLC, a Texas series limited liability company
The King Ranch, an individual series of ABC Co., LLC, a Texas series limited liability company
Not only is this naming convention helpful, it is arguably required by Texas law which requires the filing of an assumed name (which can’t be “Series A” or “Series 1” due to the obvious conflict with every other similarly named series).