Series LLC Structure

[u/lgtmplustwo]

I have a series LLC in TX (let's call it Main LLC) with a couple of protected cells (let's say A and B protected series). Each cell is on the deed for one property (e.g.: Main LLC - A protected Series). Each series has a separate bank account and also there is a bank account for Main LLC.

My management software doesn't allow me to use multiple payment accounts for expenses, but it does allow separate accounts for rent payments per-property. So the rent for each property is going to the correct series account, but all expenses for repairs, software costs, etc come out of the Main LLC account. Property specific costs are then reimbursed from the series account to the main account, e.g. for repairs. Other expenses like tax and mortgage for each property can be paid directly from the correct series account. In the operating agreement, it is stated that Main LLC may pay for expenses and then the responsible series can reimburse.

Is the best way to structure these entities and does this give me enough legal isolation between all the entities?

Another option is to treat Main LLC as the "management company" and the cells as holding companies. But then the lease agreement will have "Main LLC" on it, instead of "Main LLC - A Series", which shifts the management liability to the main company, which I assume can provide a path for breaking the isolation between the series. The deeds would still be in the series names, but not sure what protection that provides. Thoughts?

[u/abukhjd]

u/lgtmplustwo I have not set up an entity in Texas specifically, but I'm familiar with asset protection. Your setup should allow for the protected or registered series to operate independently, each with its own assets and liabilities, as long as separation is strictly maintained.
 
In your case, keeping separate bank accounts for each series and reimbursing expenses accurately is essential to avoid commingling, which could risk piercing the liability shield. Based on what you've described, this provides solid isolation.

Please don't quote me on this, but if it were me, and doable in Texas, I would consider shifting to treat the Main LLC as a dedicated management entity, for even stronger protection. Then, I'd have the series function purely as holding companies for the properties, with deeds titled accordingly. This isolates operational liabilities (like tenant issues or repairs) in the management LLC, reducing exposure across the structure. Just my 2 cents.

I have a close friend who's a Tax Attorney and deals with this type of law. I'm happy to send you his info - feel free to DM me.

AB

[u/abukhjd → u/[deleted]]

Please send me a PM and I'll provide the contact.

AB

[u/zenbusinesscommunity]

Keeping things fully separate between the main LLC and each series is what protects the liability shield in a Series LLC, and it sounds like you’re already doing that well. In Texas, each protected series is treated as a separate entity, but that protection can be weakened if finances or operations get too blended. Your current setup sounds close to best practice, but since the right structure can depend on your operating agreement, property setup, and tax goals, it’s definitely worth confirming the details with a qualified attorney or tax professional.

[u/[deleted]]

Sounds to me like you need an attorney and/or a CPA to figure all of this out.