A series LLC is basically a master LLC that has separate divisions, which is similar to an S corporation with Q-subs. I will address your questions one by one.
Generally, an LLC is formed in order to protect personal assets from a legal claim relating to real estate investments or business liabilities. Some of my clients prefer to only hold one property, or one separate venture, per LLC. Therefore, they get additional liability protection by forming and maintaining a separate LLC to hold each property or business entity. By forming a separate LLC to own and hold each legally titled separate property or business entity, theoretically only the assets owned by a specific LLC would be subject to claims or lawsuits arising against that LLC only, hence, liability would be limited to that particular property or business. However there are costs and administrative burdens associated with properly forming, qualifying and maintaining each separate LLC.
The series LLC gives another option, which is to form multiple series or "cells" within a Series LLC . Although each cell of a Series LLC can own distinct assets, incur separate liabilities, and have different managers and members, a Series LLC may be able to pay a single set of annual state fees and may be able to file one income tax return each year. In addition to the administrative streamlining, the key value is that liability incurred by one unit does not cross over and jeopardize assets titled in or allocated to other subsidiary units of the same Series LLC
As to your questions: 1 - They do not have to report to the LLC managers or they may, dependent upon the operating agreements. It can be set up either way. 2 - Yes, a separate bank account must be maintained for each series. Each series should also have it's own EIN although this is yet unclarified in the law. The proposed Treasury Regulations §(NNN) NNN-NNNN1(a)(5) published in September 2010 should become effective in 2012. The regulations are expected to provide that each series will be treated, for tax purposes, as a separate entity regardless of whether the series is considered a legally distinct entity under local law. 3. Yes, each series has to have its own name and register a dba. (You don't have to use the language "a series division of..." but I suppose you could if you prefer). 4. They are basically formed by filing the dba and setting up the company.
Here is some additional suggestions for you:
Finally, based on:
Could a series be signed / named in such a way that it doesn't actually include the word series, or is that a legal requirement? (ex, could that be "Blackacre Division only";)
Sorry if I'm going overboard here - I rather crave knowledge and would like to fully understand this "world"
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