Series Llc Texas Operating Agreement

If you`re looking to form a limited liability company (LLC) in Texas, you may have heard of a series LLC. A series LLC is a unique type of LLC that allows you to create separate «series» within one overarching LLC structure. Each series can have its own assets, liabilities, members, and tax obligations. This can be a useful structure for businesses with multiple lines of business or assets that need to be separated for liability protection.

One critical component of forming a series LLC in Texas is creating an operating agreement. An operating agreement is a legal document that outlines the rules and regulations of your LLC, including its management, ownership, and operation. It`s essentially a contract between the members of the LLC that dictates how the business will be run. For a series LLC, the operating agreement must specify the rules for the establishment, operation, and termination of each series within the LLC.

Here are some key elements to consider when drafting an operating agreement for a series LLC in Texas:

Naming and Identification: The operating agreement must specify the name of the series, which should be unique from the overarching LLC name and other series names. Each series must also have a distinct identification number or other identifier.

Management: The operating agreement should outline how each series will be managed, including the roles and responsibilities of its managers. It should also specify how decisions will be made, such as through a majority vote or unanimous agreement.

Liability and Indemnification: The operating agreement should include provisions for the liability protection of each series, as well as the overarching LLC. This may include indemnification clauses, which protect members from personal liability in certain circumstances.

Tax Obligations: The operating agreement should specify the tax obligations of each series, including separate tax filings and payment of taxes. Each series should also have its own bank account and financial records.

Termination: The operating agreement should outline the process for terminating a series within the LLC, including the transfer or distribution of assets and liabilities.

Overall, creating an operating agreement for a series LLC in Texas requires careful consideration and attention to detail. It`s essential to work with an experienced attorney who can help you navigate the complexities of this unique structure and ensure that your LLC is legally sound. With the right operating agreement in place, you can enjoy the many benefits of a series LLC, including increased flexibility and liability protection.