A common question I am asked is What is the purpose of a series LLC? In my opinion there are two primary purposes of a series LLC.
The first is to allow the creation of separate entities inside an LLC without having to create separate LLCs. Each of these series entities have their own independent existence for ownership and liability purposes as if each was a separate LLC. (Many commentators neglect to recognize the independent ownership nature of a series and only focus on the independent liability shield nature of a series.)
The second primary purpose of a series LLC is to minimize the cost of forming and operating an LLC. Most significantly, the legal and accounting costs that one would otherwise incur if he had several registered entities is greatly reduced and in some instances eliminated.
For example, the filing fee for an LLC in Texas is $325. If you have a series LLC with 10 series you will file only 1 certificate of formation for $325. If, on the other hand, you have 11 LLCs, your filing fees alone would total $3,575. A Texas series LLC has therefore eliminated the necessity of filing any additional certificates of formation. (The State of Texas does, however, require that an assumed name certificate for each series be filed with the Texas Secretary of State but that fee is nominal.)
