A series limited liability company (Series LLC) is a single Delaware company under whose umbrella any number of isolated series can exist: each series has its own investors, assets and liabilities, which do not mix with those of the others. In the US market the form is used to hold several assets or projects inside one legal structure, without incorporating a separate company for each of them.
Concept
Structure
Series companies represent a hierarchical umbrella fund structure consisting of a master company (Master LLC) and autonomous cell sub-funds (Series) it creates.
For example, in Delaware the creation of series companies is regulated by Delaware Code §18-215.
The umbrella: a Master LLC above autonomous series, each with its own investors, assets and liabilities.
Protected and registered series
Delaware distinguishes a protected series under §18-215 from a registered series under §18-218. A protected series is established under the LLC agreement; a registered series is formed by filing its own certificate with the Secretary of State and can obtain a certificate of good standing.
For either form, the statutory liability partition depends on two formalities: the master LLC's certificate of formation must contain notice of the limitation, and the records must account for the series' assets separately from the master and every other series. Both forms may contract, hold title, grant liens and security interests, and sue or be sued in their own name.
Sections 18-219 and 18-220 permit conversion in either direction without dissolving the series, subject to the LLC agreement, required approval and the prescribed filings. These are Delaware-law consequences; recognition by another state or in an insolvency proceeding still requires transaction-specific analysis. How the series stands against the other ring-fencing forms on that question — a Cayman segregated portfolio, a Luxembourg compartment, an Irish or Singapore sub-fund, and protected or incorporated cells in Guernsey, Jersey, Malta and ADGM — is set out in the cell and series comparison of the fund domicile guide.
Management
Each series may independently appoint its managers and have employees — as with an ordinary LLC, but without separate dealings with the state authorities at the registration level. That makes a series a workable route into the US market for persons with no local residency and no SSN.
Application
Series companies are used to optimize management of multiple assets or projects within a single legal structure. This model is in demand in sectors requiring risk isolation and reduced administrative costs.
| Use Case | Advantages |
|---|---|
| Real Estate Investment | Each property is held in a separate series, allowing for segregation of cash flows and transfer of control over the property through sale of the series |
| Venture Capital Investment | A separate series is established for each target company, simplifying deal structuring and portfolio management |
| Asset Management | Third-party money may be accepted and managed without registering as an investment adviser, where the 3(c)(1) or 3(c)(7) exemption is met |
In capital markets the form is used because a series relying on one of those exemptions can hold and manage third-party money without adviser registration. Investment funds use series as SPVs, each with its own investors and strategy.
Taxation
Each series may independently choose its tax regime — partnership or corporation, depending on investor objectives and business specifics.
Partnership regime (Pass Through)
If a series chooses partnership regime, it becomes a pass through structure for tax purposes. In this case the series itself is exempt from federal corporate tax, but its investors must file their tax returns based on the Schedule K-1 (Form 1065) prepared by the company, which indicates the share of profit or loss.
In other words, the investor will pay taxes only upon receiving profit from the series' activities, and only the laws of their residency will apply, not US laws. This structure allows the fund to achieve tax neutrality, which is why it is the default choice.
Corporation regime (C-Corp)
If the series chooses corporation regime (C-Corp), it becomes an independent taxpayer and must pay federal corporate tax at a rate of 21% on profit. After paying tax, remaining profit may be reinvested within the series, and dividend payments to participants are taxed at 0 to 23.8%.
This leads to double taxation, but such a regime may be beneficial for high-profit series that do not plan to withdraw capital — for example, private funds.
Finally, non-US resident participants must pay taxes on income received from the series' activities in the US (for example, when selling an asset) at a rate of 30% or according to tax treaties.
Compliance
Conditions for exemption from SEC registration
Series may function as investment funds without the need for licensing and registration of an investment memorandum with the SEC (US Securities and Exchange Commission) if they meet one of the following exceptions:
Exception 3(c)(1) - Fund with limited number of investors
Main conditions:
- Up to 100 accredited investors (meeting the SEC criteria)
- For venture funds: up to 250 investors with assets under $12 million
Look-through rule: if an investor is a legal entity created specifically to invest in the series, all its ultimate beneficiaries are counted.
Investment portfolio requirements:
- At least 80% of capital must be invested in securities of early-stage private companies
- Target companies: startups at pre-seed, seed, Series A or Series B stages
- Companies must not be traded on public markets or be subsidiaries of public holdings
Exception 3(c)(7) - Fund for qualified purchasers
Main conditions:
- All investors must be qualified purchasers:
- Individuals: investment assets from $5 million
- Institutional investors: assets from $25 million
- Number of investors: no more than 1,999
Minimum compliance requirements
Even when exempt from registration, each series must comply with:
- FinCEN beneficial ownership (BOI): under the FinCEN interim rule of 21 March 2025, domestic entities — including a Delaware Series LLC — are exempt from filing and from updating previously filed information; the duty remains only where a foreign entity sits above the structure
- Timely filing of tax returns (depends on chosen tax regime)
- Payment of franchise tax by the master company
Additional requirements:
- For series with corporation status: separate tax reporting
- When managing third-party assets: annual update of form ADV
- Regular internal audit of compliance procedures
Administration
Registration
A Series LLC comes into existence on the filing of a certificate of formation with the Delaware Secretary of State; the statute requires no presence in the state, and a non-resident organiser acts through a registered agent. Beyond the filing itself, a formation agent applies its own identification standards — normally an identity document for the beneficial owner, proof of residential address and a description of the intended activity. Further series are then established under the LLC agreement, and a registered series by its own filing under §18-218.
Annual administration
To maintain the company in active status, it is necessary to:
- Timely pay the Delaware annual tax ($400 from the master company, $100 per year for each registered series)
- File annual reports with government authorities
- Check FinCEN BOI status: domestic structures have been exempt since the March 2025 interim rule, and the duty survives only for foreign reporting companies
Q/A
How quickly can a Series LLC be registered?
With all necessary documents available, the company can be ready to operate in one business day. For urgent registration, processing within several hours is possible for an additional fee.
What tax advantages does a Series LLC provide?
The key taxation principle of a Series LLC is tax neutrality. This means the company can choose a tax regime for each series according to specific objectives and business characteristics. Income received from US sources will be subject to taxation under US law regardless of the chosen regime. In international structuring, Series LLC allows efficient management of tax obligations and avoidance of double taxation.
Can a bank account be opened for a Series LLC?
Yes, a bank account can be opened for a Series LLC in both US banks and financial institutions in the UK, Singapore and Hong Kong. Separate accounts can be opened for the master company and for each series.
How to prepare tax reporting for a Series LLC?
Tax reporting depends on the chosen tax regime. For the master company and series choosing partnership regime, Form 1065 and K-1 for each participant are filed. For series choosing corporation regime, form 1120 is filed with separate profit tax calculation.