What You Need to Know
Effective July 1, 2026, Florida will add a comprehensive framework for “protected series” LLCs to the Florida Revised Limited Liability Company Act (Sections 605.2101–605.2802). A Series LLC allows a single “parent” LLC to create multiple protected series within itself. Each series can hold its own assets, conduct its own operations, have its own members and managers, and—most importantly—incur its own liabilities separate from the parent and other series.
Florida’s approach is distinctive: it uses a broad “extrapolation” concept that extends the default rules for regular Florida LLCs to each protected series, unless the statute specifically says otherwise. This gives practitioners a familiar legal framework to work within.
Why It’s Important
The new law offers significant flexibility for structuring investments and operations:
- Asset protection: A “horizontal shield” protects each series from the debts of the parent LLC and other series—meaning a claim against one series generally cannot reach the assets of another.
- Cost efficiency: Rather than forming multiple separate LLCs, a single parent LLC can house numerous ventures, reducing costs and administrative overhead.
- Practical applications: Real estate investors can isolate individual properties; entrepreneurs can separate distinct startups or fund portfolios; family businesses can segregate different asset classes—all under one umbrella entity.
Key limitations to keep in mind: The horizontal shield is not self-executing. It requires strict, accurate, and contemporaneous recordkeeping. Failure to maintain proper records may allow creditors to pierce the horizontal shields. Additionally, protected series cannot independently merge, convert, or domesticate. Some states may not recognize series LLCs, and may not recognize the asset protections provided by a series LLC.
Practical Uses
- Real Estate Investment. A real estate fund can place each property, or category of properties, into a separate protected series, allowing investors to choose which series they wish to invest in while ensuring that a debt or liability at one property does not imperil the others.
- Multi-Venture Entrepreneurs and Investment Funds. Entrepreneurs managing distinct lines of business can house each venture in a separate protected series, reducing both risk and administrative burden compared to forming and maintaining numerous standalone LLCs. Investment funds can establish an unlimited number of series—each with a different investment focus, equity structure, and management arrangement—while operating under a single entity. This could create meaningful cost savings in administrative or expert fees.
- Family Businesses and Investment Groups. Families, family offices, or groups managing different assets or investments can segregate them for liability and management purposes, tailoring each series’ membership and governance to the unique needs of each asset pool.
What You Can Do
- Evaluate whether a Series LLC fits your needs. If you hold multiple real estate properties, run several business ventures, or manage a family investment portfolio, consider whether the protected series structure offers advantages over maintaining separate entities.
- Plan for robust recordkeeping. The liability shield depends on maintaining separate, accurate books and records for each series. Work with counsel to establish accounting and documentation protocols before forming your series.
- Review your operating agreement. Formation of a protected series requires the affirmative vote or consent of all members unless the operating agreement provides for a lesser threshold. Ensure your governing documents address series creation, naming (the series name must begin with the parent LLC’s name), and management.
- Consider multi-state implications. If your business operates across state lines, be aware that not all states recognize series LLCs formed elsewhere. Discuss with counsel how this may affect your operations and liability protections.
- File a certificate of designation. When you are ready to establish a protected series, you will need to file a “certificate of designation” with the Florida Department of State for each series you create.
For more information or guidance on whether a protected series LLC is right for your business, please contact Gil Greber or Matthew Scheer.
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