Series LLCs Explained: Are They Worth It in 2025?

If you run multiple businesses or manage several investment properties, setting up separate LLCs for each can get expensive fast. That’s where a Series LLC comes in. It lets you create multiple “mini LLCs” under one main entity, each with its own assets, liabilities, and operations.

In this guide, we’ll break down what a Series LLC is, how it works, which states allow it, and whether it’s worth forming one in 2025.

 

What Is a Series LLC?

A Series LLC is a special type of limited liability company that allows one “parent” LLC (called the master LLC) to hold multiple “child” LLCs, also known as series. Each series operates independently. It can have its own assets, members, bank account, and even a business purpose. The key benefit is that if one series gets sued, the others are protected.

Think of it as having multiple businesses under one roof, but each room is legally separate from the others.

 

How a Series LLC Works

Here’s a simple example:

Let’s say you own three rental properties.

• Series 1: Property in Texas
• Series 2: Property in Florida
• Series 3: Property in California

Each property is owned by its own series. If a tenant sues over an issue in the Texas property, only that series is at risk, your other two properties remain protected. You don’t need to form three separate LLCs, which saves money and reduces paperwork.

Key Benefits of a Series LLC

1. Asset Protection Between Series

Each series is legally separate. If one faces a lawsuit, the others stay protected.

2. Lower Setup and Maintenance Costs

You only pay one filing fee for the master LLC and add series internally, instead of filing new LLCs every time.

3. Simplified Administration

One EIN and one annual report (in most states) can cover all series.

4. Flexibility for Growth

You can add new series easily as your business expands without starting from scratch.

5. Ideal for Investors or Entrepreneurs with Multiple Ventures

Real estate investors, franchise owners, or online business owners can keep different ventures legally separate while managing them under one parent structure.

 

Check out our full LLC guide on our website; it’s made for creators, freelancers, and small business owners who want to get started smartly with an LLC.

State LLC Guides

 

The Drawbacks You Should Know

While Series LLCs sound appealing, they aren’t perfect for everyone.

1. Not Legal in Every State

Only about 20 states recognize Series LLCs, including Texas, Delaware, Illinois, Nevada, and Utah. If your business operates in multiple states, that can cause confusion or legal risk.

2. Tax Complexity

The IRS doesn’t have a consistent approach to Series LLCs yet. Some states tax each series separately, while others don’t. This makes accounting more complex.

3. Banking Challenges

Some banks don’t understand or support Series LLCs. You may have to open separate accounts for each series, depending on your provider.

4. Limited Legal Precedent

Series LLCs are still relatively new. There aren’t many court cases defining how well liability protection holds up in every state.

 

Which States Allow Series LLCs

As of 2025, these states support Series LLCs:

• Alabama
• Arkansas
• Delaware
• Illinois
• Iowa
• Nevada
• Oklahoma
• Tennessee
• Texas
• Utah
• Washington D.C.
• Wyoming

Some states, such as California and New York, do not permit Series LLCs to be formed locally; however, they may recognize them from other states. If you plan to operate across multiple states, check with your Secretary of State or a formation service before filing.

 

How to Form a Series LLC

Setting up a Series LLC is similar to forming a standard LLC, but you must specify it in your formation documents.

Step 1: Choose a State

Pick a state that legally allows Series LLCs. Delaware and Texas are popular because they have clear laws for this structure.

Step 2: File the Articles of Organization

When filing your LLC, select the Series LLC option or include language in your articles that allows for multiple series.

Step 3: Create an Operating Agreement

Your Operating Agreement is crucial. It should describe how each series will operate, who manages them, and how assets are separated.

Step 4: Set Up Each Series

Each series needs its own:

• Name
• Bank account
• Records and contracts
• Asset ownership

This ensures each series remains legally distinct.

Step 5: Stay Compliant

Even though the master LLC holds all the series, you must:

• Keep separate financial records
• File reports as required by your state
• Maintain individual liability for each series

 

Tax Considerations

The IRS doesn’t treat Series LLCs the same way in every state. Generally:

• Each series can be taxed as a separate entity if it operates independently.
• You can elect tax status for each series (for example, one taxed as a partnership, another as an S Corp).
• States may have different rules on whether each series files its own return.

This flexibility can be great for tax strategy, but it also means you’ll want professional guidance from an accountant who understands Series LLCs.

 

When a Series LLC Makes Sense

A Series LLC is worth considering if:

• You manage multiple properties or business units.
• You want to simplify administration while protecting assets.
• You plan to expand into multiple ventures over time.
• You prefer to manage everything under one legal umbrella.

It may not be ideal if you operate in many states that don’t recognize Series LLCs or if you want a structure that’s simpler for banks and investors to understand.

 

Final Thoughts

Series LLCs offer a flexible way to manage multiple businesses or properties under one entity while keeping your assets protected. They can save time, reduce filing costs, and make scaling easier.

However, the structure isn’t for everyone. If your business spans multiple states or you want a simple setup, forming standard LLCs may be the better route.

Before making a decision, talk with a business attorney or use a trusted service like Swyft Filings or Bizee (formerly Incfile). They can help you compare your options and file correctly based on your state’s laws.

 

 

In 2025, Series LLCs continue to grow in popularity, but they work best for business owners who understand how to manage and separate their assets properly.