A Texas Series LLC is a unique type of Limited Liability Company that allows a business to establish separate, distinct "series" or "divisions" under a single master LLC umbrella.

• Liability Segregation: The primary benefit is that the debts, liabilities, and obligations of one series are enforceable only against the assets of that series, providing a liability shield between each independent series. This is especially advantageous for businesses with multiple assets (like real estate holdings) or distinct lines of business.
• Cost Efficiency: Instead of forming and maintaining multiple separate LLCs (each with its own filing fees and potentially more complex reporting), a Series LLC requires only one initial Certificate of Formation filing with the state.
• Operational Flexibility: Each series can have its own members, managers, and operational rules, allowing for highly customized internal governance under one entity.

We can guide you through setting up and maintaining the proper operational requirements (like separate bookkeeping and records for each series) to ensure this liability protection is legally sound.

The Certificate of Formation only officially registers your entity with the State of Texas; it does not govern its internal operation. The next crucial step is to create the governing organizational documents that define the roles, responsibilities, and financial structure of the business. These include:

• For LLCs: The Company Agreement (also known as an Operating Agreement) is the most critical internal document. It specifies ownership percentages, management structure (member-managed or manager-managed), allocation of profits and losses, and procedures for selling membership interests or dissolving the business.
• For Corporations: The Corporate Bylaws are the internal rulebook, detailing procedures for meetings (shareholder and director), the election of directors and officers, and the issuance of stock.
• Ancillary Agreements: For all structures, we recommend crucial supplementary documents like Buy-Sell Agreements, which plan for the transfer of ownership upon the death, disability, or departure of a key owner.

These documents are essential to prevent future disputes and protect your liability shield.

Maintaining "corporate separateness" is vital to ensure your personal assets remain protected. Ongoing compliance requirements for most Texas business entities include:

• Annual Franchise Tax Report (and Public Information Report): Most Texas entities, including LLCs and Corporations, must file a Franchise Tax Report (and a Public Information Report) with the Texas Comptroller of Public Accounts annually by May 15, even if no tax is due.
• Internal Formalities: Maintaining records of key decisions. For Corporations, this means documenting annual shareholder and director meetings. For LLCs, this involves maintaining proper records and minutes documenting major transactions and changes.
• Registered Agent Maintenance: You must continuously maintain a registered agent and registered office in Texas to receive official legal and government correspondence.
• Federal Requirements: You must comply with federal requirements, such as obtaining an Employer Identification Number (EIN) and, if applicable, filing a Beneficial Ownership Information (BOI) report with FinCEN.

Failing to adhere to these rules can put your liability protection at risk. Our Houston business attorneys can help establish the necessary systems and provide counsel for ongoing compliance.