Wyoming Series LLC
What is a Series LLC? The easiest way to explain a Series LLC is that it’s like setting up a holding company and there are subsidiaries under that holding company.
But rather than each subsidiary LLC being filed as a separate entity, they are all contained under a single filing with the Secretary of State. This Series LLC structure provides asset protection and tax benefits just like a holding company does.
A Wyoming Series LLC can save investors considerable money as only the parent company needs to file an annual report and pay the initial filing fee.
One Series LLC benefit is that each individual series is considered to be separate from the other series and the parent company. This means the debts, liabilities, and earnings of each company are separate from another. Further, each individual series can either be wholly owned by the parent company or can have different partners.
This separation provides benefits for those in risky industries. For example, a real estate investor may place each property into its own series. This separates each property from the others in case of a lawsuit or other credit event. An E-commerce company may wish to separate brands due to liability, for example selling beer and hemp. Each product line carries its own risks and should be separated in case of an incident.
How they are taxed
Given each Wyoming Series Limited Liability Company is considered its own company, it may select its own tax election. The individual Series may alternate between disregarded entities, partnerships, S-Corp, and C-Corp tax elections by filing the relevant forms with the IRS. This flexibility provides those with disparate earnings ways to possibly minimize their tax bills. But each Wyoming Series LLC must have its own Employer Identification Number (EIN).
They are tied together on the public record.
All the companies are separate for tax and asset protection purposes but are not independently anonymous. The parent and each Series will be contained on the same filings, and as such will be linked together. This does not give you the same level of privacy that you would have with separately filed LLCs.
How they are named
If your parent company is named “Best Holdings, LLC” then each Series must be named as follows:
Best Holdings LLC Series 1
Best Holdings LLC Series 2
Best Holdings LLC Series 3
As you can see a Series LLC is best used as a Wyoming holding company and not an operating company. For example, if you have a Series LLC named Best Carpet Cleaning LLC and you put another operating company that is doing construction under it the name of the construction company would be Best Carpeting Cleaning LLC Series 1. Not exactly what you want your construction company to be called.
But a WY Series LLC for real estate holding or asset holdings will save you initial filing fees and yearly renewal fees and should be considered in those types of cases.