How to Create a Series LLC in Wyoming

What Is a Series LLC?

A Series LLC is a unique form of a limited liability company that allows for the creation of multiple, distinct series or cells within a single LLC. Each series operates independently, with its own assets, liabilities, and members. This structure allows for the segregation of assets and liabilities among the series, providing a flexible and cost-effective way to manage multiple business ventures under one umbrella entity.

Does Wyoming Allow Series LLCs?

Yes, Wyoming permits the formation of Series LLCs under its state laws. The authorization for Series LLCs is provided by the Wyoming Limited Liability Company Act, specifically under W.S. 17-29-211. It is essential to include specific language in the formation documents to establish a Series LLC, ensuring that each series is recognized as a separate entity.

How a Wyoming Series LLC Works

In a Wyoming Series LLC, the master LLC acts as the overarching entity that controls the individual series. Each series can hold its own assets, incur liabilities, and have distinct members and managers. The separation of liabilities is a key feature, as the debts and obligations of one series do not affect the others. Proper recordkeeping and adherence to structural requirements are crucial to maintaining this separation and ensuring legal protection.

Benefits of Forming a Series LLC in Wyoming

• Cost Efficiency: Forming a Series LLC can be more cost-effective than creating multiple traditional LLCs, as it reduces the need for separate filings and administrative tasks.
• Asset Segregation: Each series can hold and manage its own assets independently, protecting them from the liabilities of other series.
• Administrative Flexibility: The structure allows for streamlined management and operations across different business ventures.

Limitations and Risks of a Wyoming Series LLC

• Legal Uncertainty: The Series LLC structure is not universally recognized, which may lead to legal challenges in jurisdictions outside Wyoming.
• Banking and Lending Challenges: Some financial institutions may be unfamiliar with Series LLCs, complicating banking and lending processes.
• Tax Complexity: Navigating tax obligations for each series can be complex, requiring careful compliance with state and federal tax laws.

Who Should Consider a Wyoming Series LLC?

A Wyoming Series LLC is ideal for businesses involved in real estate, asset holding, or intellectual property management. It is suitable for entrepreneurs managing multiple ventures who seek liability protection and administrative efficiency. However, for simpler business structures, a traditional LLC may be more appropriate.

Step-by-Step: How to Create a Series LLC in Wyoming

Step 1: Choose a Name for the Series LLC

The name of the Series LLC must comply with Wyoming's naming requirements, including the use of "Limited Liability Company" or abbreviations like "LLC" or "L.L.C." Each series should have a distinguishable name that includes the parent LLC's name.

Step 2: Appoint a Wyoming Registered Agent

A registered agent is required to receive legal documents on behalf of the LLC. The agent must be a resident of Wyoming or a business entity authorized to do business in the state.

Step 3: File the Certificate of Formation

The Certificate of Formation must be filed with the Wyoming Secretary of State. This document includes the LLC's name, registered agent information, and management structure. Filing can be done online or by mail.

Step 4: Include Series LLC Language

It is crucial to include specific language in the Certificate of Formation that authorizes the creation of series. Failure to do so may result in the inability to form distinct series under the LLC.

Step 5: Draft a Series-Compliant Operating Agreement

An Operating Agreement is essential for internal governance. It should outline the management structure, asset and liability separation, and operational procedures for each series.

Step 6: Establish Individual Series

Individual series are created internally through documentation and recordkeeping. Each series should maintain separate records to ensure liability protection.

Step 7: Obtain EINs (Parent and Series, If Needed)

An Employer Identification Number (EIN) is required for the parent LLC and may be necessary for each series, depending on their activities and tax obligations.

Step 8: Open Separate Bank Accounts

Separate bank accounts for each series are vital to maintain financial separation and prevent commingling of funds, which could jeopardize liability protection.

Step 9: Comply With Wyoming Tax Requirements

Each series must comply with applicable state taxes, including sales tax and income tax, where relevant. Accurate reporting and timely payment are essential.

Wyoming Series LLC Filing Fees and Costs

The filing fee for the Certificate of Formation is $100. Additional fees may apply for each series, depending on the specific requirements and services used.

Wyoming Franchise Tax and Series LLCs

Wyoming does not impose a franchise tax on LLCs, including Series LLCs. However, each series must comply with state tax obligations, which may include sales and use taxes.

Ongoing Compliance Requirements for Wyoming Series LLCs

Annual reports must be filed with the Wyoming Secretary of State to maintain good standing. Proper recordkeeping and compliance with state laws are essential for each series.

Common Mistakes When Forming a Series LLC in Wyoming

• Missing Required Series Language: Failing to include series authorization in the formation documents can prevent the establishment of series.
• Poor Recordkeeping: Inadequate documentation can lead to liability issues and loss of legal protection.
• Mixing Assets Between Series: Commingling funds or assets can undermine the liability separation between series.

Series LLC vs Traditional LLC in Wyoming

A Series LLC offers a flexible structure with potential cost savings and asset protection benefits, making it suitable for complex business operations. In contrast, a traditional LLC is simpler and may be preferable for single-venture businesses or those operating in jurisdictions that do not recognize Series LLCs.

Additional Resources

• Wyoming Secretary of State Main Page
• Wyoming State Statutes
• Online Filing System
• Wyoming Department of Revenue
• Contact Information: Phone: (307) 777-7311, Email: business@wyo.gov

This article provides general information about Wyoming LLC formation requirements under the Wyoming Limited Liability Company Act. It is not intended as legal advice. Persons forming an LLC should consult with a private attorney regarding their specific circumstances.