The series LLC shares core characteristics with the traditional LLC, including the benefit of informal management, an effective liability shield, and pass-through taxation; but a series LLC also segregates and compartmentalize assets and liabilities within individual series. Accordingly, in a series LLC the effect of a lawsuit or judgment is contained within the specific series. This contrasts with a traditional LLC which holds its assets in a collectively vulnerable pool. In any context in which multiple properties are involved, this is a compelling reason to consider a series LLC rather than a traditional LLC. As an example, suppose there is a foreclosure on a property contained in Series A, and there is a deficiency at the foreclosure sale which results in a judgment. Assuming that the series company and its transactions were properly structured, the judgment would be enforceable only against Series A and its assets, not against the assets of Series B, Series C, or the assets of the company at large. Note that it is not necessary to implement the series features of a series company unless and until one is ready to do so; until then the company operates exactly like a traditional LLC. Accordingly, there is generally no downside to choosing to form a series LLC rather than a traditional LLC, even if there is no immediate need or intention to implement the series aspect of the company (n.d., Willis).
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