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The Series Limited Liability Company in Delaware

It is generally good practice to segregate assets with high potential liabilities from other, more stable assets. Usually this can be accomplished by isolating such assets in their own entity.

One other means of achieving this with a much lower recurring overhead is by use of the Series LLC in Delaware. Section 18-125 of the Delaware Limited Liability Company Law, titled Series of members, managers or limited liability company interests - provides for the creation of Series LLCs.

The series of members, managers or interests are provided for in the Certificate of Formation and separate and distinct records and accounting must be kept for each such series and great care must be taken in the drafting of the limited liability company agreement. The effect is that none of the debts, obligations or expenses of one series can be enforced against the assets of another series.

This can also be a useful entity where there are strict licensing or capital obligations. These types of entities have been used with great effect in the offshore world in jurisdictions such as the Cayman Islands or Bermuda with similar entities known as Protected Cell companies or Segregated Portfolio companies. Suitable in the insurance and mutual fund industry, these companies have given birth to the "rent-a-captive" phenomenon.

The Delaware Series LLC can be particularly cost-effective with formation costs no greater than the ordinary LLC.

More information can be found by visiting our website at www.ibcf.com, or by emailing us at [email protected].

Previous issues of the IBCF Newsletter can be found at: http://www.ibcf.com/news/newshome.php

About IBCF:
International Business Company Formation, Inc. assists legal professionals with company formation, both internationally and offshore, and with registered agent and corporate document retrieval services throughout the world.

International Business Company Formation is an affiliate of National Registered Agents, Inc., a fully licensed professional Registered Agent for thousands of business entities, large and small, throughout the entire United States.

International Business Company Formation, Inc. is located in the historic district of Tappan, New York, approximately thirty minutes from midtown Manhattan.

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Tappan, New York 10983
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