When you plan to commence a business, apart from the right product quality, hiring the right people, finding the best NYS LLC filing fee, and incorporating the best working culture, many other things need to be taken care of.Understanding series LLCs first requires a grasp on how to form a basic LLC. To ensure you have a strong foundation of knowledge, here is a resourceful guide on how to create an llc. Once you’ve grasped that, you’ll be better prepared to evaluate the benefits of a series LLC for your particular business.
But the one question that keeps popping up in the mind of most business owners is how series LLC works and what are its advantages? If you are in a similar situation, you have come to the right place; as in this blog post, we will talk through series LLC in a detailed manner.
The working of series LLC
It will be much easier to understand the working of series LLC by taking examples of a condo and a duplex. Imagine a situation where you own both a duplex and a condo. In this case, you will be the person responsible for all the obligations and liabilities related to these two properties. Moreover, all your non-exempt assets, along with the duplex and condo, will be at risk.
If you buy the condo and duplex by using your traditional LLC, then you will become safe from any type of personal liability, but even in this case, both the duplex and the condo will be exposed to liabilities of others.
In such a situation, you have to check the NYS LLC filing fee and then build a parent LLC by filing a certificate of formation with a particular language. It will authorize the creation of more than one subsidiary LLCs. After that, you can go on to make two LLCs under a single parent LLC, one for buying the condo and another one for purchasing the duplex.
After this, if someone is going to file a personal injury lawsuit for the duplex, only the LLC used to buy the duplex will be held responsible. Both the other LLC and the parent LLC won’t be affected because of this.
The advantages of series LLC
Limited liability
You should always go for series LLC if you are running more than one business or if your single business has multiple business operations. By using series LLC, you can separate every business into its own specific LLC.
This is necessary because by checking the NYS LLC filing fee and then separating businesses, the liabilities of one business or business operation don’t affect others.
Simplified tax
If you don’t want to make filing taxes an arduous journey, the best thing to do is start embracing series LLC. Managing multiple companies is already an arduous task, and filing separate taxes for all those businesses can make your life more difficult.
But if all the LLC owned by you are held in a series LLC structure, then the profit and loss of every LLC can pass through to the parent LLC. This means you by using series LLC; you get rid of the hassle of filing multiple tax returns.
Many business owners have simplified the tax procedure by using the power of a series LLC and transforming the single LLC into a series LLC is not that difficult.
Running a business doesn’t always mean doing hard work, but it also means dealing with things by making intelligent decisions. Transforming your business into a series LLC can offer you many benefits in terms of tax filing and liability, and the best part is that filing for a series LLC is a breeze.