Series LLCs: which states, when they work, when they don't

Overview

The catch is that the structure is not recognized in every state, the inter-series liability shield has been meaningfully tested in only a few reported cases, and most of the federal tax and banking infrastructure that normal LLCs rely on treats series as the oddities they are. For certain use cases — notably rental-property portfolios held by their operators in the home state — a Series LLC is the right structure. For many others, it is a false economy.

This piece walks through the jurisdictions that allow the form, the 2026-accurate fee picture, the liability and tax questions that still have sharp edges, and the three common misuses.

What a Series LLC actually is

A Series LLC is a single legal person at formation — one LLC, one filing with the Secretary of State, one EIN at the master level. But its operating agreement (and, in many states, its filed certificate) authorizes the creation of internal "series" or "cells," each of which:

• Holds separate assets in its own name, often through a naming convention like "ABC LLC, Series A."
• Is managed by its own members or managers, who may be different from the members or managers of other series.
• Has its own profit/loss allocations.
• Is — in most Series LLC statutes — liability-walled from the debts of other series, provided specific formalities are observed.

Think of it as a corporate holding company with subsidiaries, except without the cost of forming each subsidiary. Or, less generously, as a single LLC with an unusually ambitious operating agreement that courts might or might not respect.

The jurisdictions that allow Series LLCs (2026)

Tracking the list is harder than it looks — states revise their LLC acts on irregular schedules, and the scope of what a series can do varies. As of early 2026, the following U.S. jurisdictions have statutory Series LLC provisions:

• Delaware — the original, since 1996. Strongest case law.
• Illinois — notably, requires each series to file its own Certificate of Designation with the Secretary of State.
• Texas — widely used.
• Nevada — used largely for asset-protection plays.
• Tennessee — similar.
• Utah — statute revised under the Revised Uniform LLC Act (RULLCA) to include protected series.
• Iowa.
• Missouri.
• Oklahoma.
• Kansas.
• Alabama.
• Indiana.
• Montana.
• North Dakota.
• South Dakota.
• Wisconsin.
• Wyoming.
• District of Columbia.
• Virginia (added under its 2020 LLC Act revision, effective 2020).
• Puerto Rico.

That is roughly eighteen to twenty jurisdictions depending on how you count Puerto Rico and the newer RULLCA adopters. A handful of other states (e.g., Arkansas, Nebraska) have adopted the Uniform Protected Series Act in various forms; the list updates.

Notably absent: California, New York, Florida, Massachusetts, Michigan, Pennsylvania, Georgia, North Carolina, Arizona, Colorado, Ohio, and most of New England. That matters, because it shapes the single most important question about the structure: what happens when a Series LLC formed in State A is sued in State B.

The non-Series-state problem

A Series LLC formed in Delaware, with property and operations in Florida, registered as a foreign LLC in Florida — will Florida courts respect the inter-series liability shield? Florida does not have a Series LLC statute of its own.

The honest answer is "probably, but not definitely, and there is not a lot of case law." The leading arguments:

• Full Faith and Credit and internal affairs doctrine. The internal organization of an entity is governed by the law of its state of formation. A Delaware Series LLC's internal structure is a Delaware question; a Florida court adjudicating a tort claim against "Series B" should apply Delaware law to the question of whether Series B is a distinct liability compartment. This is the theory and it is defensible.
• Public policy exceptions. Some non-Series states have hinted that they may decline to recognize the series shield on public policy grounds, particularly in consumer-protection contexts. There is not a clean line of authority here.
• Bankruptcy treatment. The federal Bankruptcy Code does not clearly treat a protected series as a separate "person" capable of filing its own case. In 2024 bankruptcy practice, this remained unsettled, and treating a series as its own debtor was not a safe assumption.

For practitioners in 2026, the upshot: use a Series LLC where the series themselves will be operated, owned, and taxed entirely within a Series-LLC-recognizing state. A Texas real-estate investor buying Texas properties and operating them from Texas is a clean fit. A founder in California using a Delaware Series LLC for California-based rental properties is using a structure whose liability shield has never been tested in California courts.

The fee picture

This is where the theoretical savings live.

Delaware

• $110 filing fee for the master Series LLC.
• $300 annual franchise tax on the master LLC. Crucially, Delaware does not charge separate franchise tax for each series — this is the jurisdiction's core appeal for investors who want many cells.
• Each series can designate itself internally without a state filing.
• Effective cost for a 10-series portfolio: $300/year. Versus ten standard Delaware LLCs at $300 each = $3,000/year.

Illinois

• $400 filing fee for the master.
• $50 Certificate of Designation required for each series at formation. Meaning Illinois is the exception — a Series LLC with ten cells is ten filings.
• Annual fee of $75 per series.
• Effective cost for a 10-series portfolio: ~$750/year, plus formation costs. Less dramatic savings.

Texas

• $300 filing fee for the master.
• No per-series state filing required, but a Franchise Tax annual report required for the master.
• No separate franchise tax per series (though Texas franchise tax depends on revenue — if aggregate revenue exceeds the no-tax-due threshold, currently $2.47M, the master pays).
• Effective cost for a 10-series portfolio: $0–$300/year in state fees. Popular structure for Texas real-estate investors specifically for this reason.

Nevada

• $75 filing fee for the master.
• $200 state business license per series, annually — Nevada reads its business license broadly.
• $150 annual list of managers per series.
• Effective cost for a 10-series portfolio: ~$3,500/year. Series savings are small; the structure is more about compartmentalization than cost.

Wyoming

• $100 filing fee for the master.
• $60 minimum annual report for the master.
• No per-series fee.
• Effective cost for a 10-series portfolio: $60/year. By a significant margin the cheapest serious jurisdiction for many cells, which is why Wyoming and Delaware dominate the real-world Series LLC market.

When a Series LLC genuinely works

Three use cases account for most of the structure's legitimate applications:

1. Multiple real-estate properties held by the same owner in a Series-recognizing state

The canonical case. A Texas investor with ten rental properties in Texas forms a Texas Series LLC, puts each property in its own series, operates each under its own local name, maintains separate books and bank accounts per series, and gets the compartmentalized liability protection of ten LLCs for the cost of one franchise tax. Every step is within a Series-recognizing jurisdiction; every relationship to tenants, vendors, and insurance is with the series-as-operator; there is no interstate ambiguity to worry about.

2. Registered investment operations with sub-strategies

Some asset managers use a Delaware Series LLC to operate multiple investment funds that share a general partner, a back office, and administrative infrastructure, but where each fund is legally compartmentalized. Delaware's series statute was effectively designed for this use case, and it is one of the few where you can assume both counsel and investors are comfortable with the form.

3. Internal brand compartmentalization for a single operating business

A company that operates multiple brands from the same organization — say, a holding company with three DTC e-commerce brands targeting different segments — sometimes uses a Series LLC so that liability in one brand does not reach the others, without paying the overhead of three complete subsidiaries. This is a weaker case than real estate (courts are more comfortable respecting a liability shield between discrete parcels of real property than between related brands with shared employees and shared vendors), but it is done.

When a Series LLC fails

Three scenarios where founders consistently misuse the structure:

1. The cross-state rental-property portfolio

An investor living in California buys rental properties in Arizona, Nevada, and Utah. They form a Delaware Series LLC and put one property in each series.

Problems:

• California has no Series LLC statute. California's Franchise Tax Board takes the position that each series "doing business" in California is itself "doing business" and must register as a foreign LLC and pay the $800 minimum franchise tax — per series. FTB guidance has been explicit about this since at least 2013. A ten-series Delaware LLC with California nexus can owe California $8,000/year in minimum franchise tax alone, which wipes out the structure's savings.
• Arizona, another non-Series state, has been less explicit but similarly inclined to treat each series as a separate filer.
• Utah is a Series state; the Utah properties may be cleanly compartmentalized. The Nevada properties likewise. The California home-state nexus question swamps the savings.

A portfolio spanning Series-recognizing states and non-recognizing states is almost always more expensive and less protected as a Series LLC than as a collection of standard single-property LLCs.

2. A single operating business trying to wall off a subsidiary activity

A SaaS company with a main product considers spinning off an experimental new product into "Series B" of a master LLC to limit product-liability exposure from the new product.

Problems:

• Shared employees. If the same engineers work on both products, courts and creditors can argue the series are not really separate.
• Shared contracts, shared infrastructure, shared vendors. A ruptured liability shield is more likely when the operational separation is thin.
• The federal tax treatment of a series with shared operations is also murkier than when the series are clearly distinct businesses.

The proper tool here is a real subsidiary, not a series.

3. Banking and insurance confusion

Even when the legal structure is clean, the practical infrastructure is often not.

• Banking. Most U.S. banks do not have a coherent procedure for opening accounts in the name of a specific series. The master's EIN is typically used; the account is then labeled for the series. When a lawsuit asks "whose money was in this account," the answer is less clean than with a standalone LLC. Mercury, Relay, and a handful of fintechs have become more comfortable with series accounts in recent years; most community banks have not.
• EINs. The IRS issues one EIN per legal person. Until a 2010 IRS proposed regulation, the position was that a Series LLC had one EIN total. That proposed regulation — which would have treated each series as a separate entity for federal tax purposes — was never finalized. In current practice, most practitioners obtain a separate EIN per series using the SS-4 process, treating each as a separate entity for tax. The IRS accepts the applications but has not formalized guidance.
• Insurance. Property and liability insurance is written to a named insured. A Series LLC that does not clearly list each series as an insured — or, worse, that holds insurance only at the master level — can lose the benefit of the liability compartmentalization the structure is supposed to provide. A defendant's attorney will happily argue that a claim against "Series A" implicates the master's coverage too.
• Titling of assets. Real estate deeds, vehicle titles, and intellectual-property assignments all need to be in the name of the specific series ("ABC LLC, a Delaware series limited liability company, Series B"), not in the name of the master. Sloppy titling is the single most common reason the liability shield fails in the few reported cases.

The federal tax picture

The 2010 proposed regulations treated each series as a separate entity for federal tax purposes by default, electable to be treated otherwise. Those regulations were never finalized. Current practice is effectively to follow the proposed regulations — treat each series as a separate entity, file separate returns or Schedule Es, maintain separate books — on the basis that the IRS has signaled that as its preferred approach, even though it has no binding force.

A single-member series owned by a single individual is a disregarded entity (reported on Schedule E or Schedule C, depending on activity). A multi-member series files its own Form 1065. A series can separately elect S-Corp or C-Corp treatment. All of this works in practice; none of it is on wholly stable ground until the IRS finalizes.

For state tax, the picture is state-specific and mostly tracks the state's general approach to the Series LLC form: Series-recognizing states generally treat each series as a separate filer for state tax where applicable; non-recognizing states are more variable.

Operating formalities — the ones that matter

The statutes of most Series states condition the inter-series liability shield on specific formalities. The common ones:

1. The operating agreement must clearly authorize the creation of series and describe the liability shield.
2. Records of the assets associated with each series must be maintained separately, distinguishable without substantial difficulty.
3. The series must be named and identifiable, typically using a convention that makes clear which series is contracting.
4. In some states (Illinois most notably), separate public filings are required for each series.
5. Separate bank accounts per series are best practice, and may be functionally required for the shield to hold up.

Failures here — commingled accounts, sloppy titling, an operating agreement that was never amended to add Series C — are how the shield fails. Not the statute; the execution.

Alternatives worth considering

Before forming a Series LLC, founders should at least consider:

• A plain master LLC with multiple wholly-owned LLC subsidiaries. More filings, more annual fees, but clean liability, clean banking, clean insurance, no federal-tax ambiguity.
• A holding corporation with subsidiaries. Standard structure for multi-brand operating companies; cleaner where equity is being issued.
• For real estate: a single-property LLC per property, all owned by the same parent LLC or holding company. More expensive in state fees; cleaner in every other respect.

The structures a Series LLC replaces are not expensive per unit. The question is whether the combined savings across a portfolio justify the execution risk and the interstate recognition risk.

Bottom line

Series LLCs are the right answer for a specific kind of investor: someone holding many discrete assets in a single Series-recognizing state, who can maintain operational separation between series without shared personnel or infrastructure, who has counsel and a banker comfortable with the form, and who is not relying on the liability shield to extend across state lines.

For everyone else — particularly for founders attracted to the structure because they read that "you can form one LLC and get ten" — the savings are mirage-adjacent. The single-property-LLC approach is slightly more expensive and considerably less surprising. For serious operators, the series structure is an advanced tool; for beginners, it is a foot-gun.