Wyoming Series LLC: How Protected Series Work

How a Wyoming series LLC works

Under W.S. 17-29-211, an operating agreement may establish one or more designated series of members, managers, transferable interests or assets. If the statute's conditions are met, the debts of a particular series can be enforced only against that series' assets, not against the company generally or other series, and the debts of the company or other series cannot reach that series.

People use series to keep separate rental properties, product lines or investments in one legal entity with internal walls. The state charges $10 for each series designated or established, which is far less than forming a new LLC for each asset.

Source: wyoleg.gov

The conditions that make the wall hold

The liability limits apply only if three things are true (W.S. 17-29-211(c)): the records accounting for each series' assets are kept separately from the company's and other series' records, the operating agreement specifically provides for the limitations, and notice of the limitations is included in the articles of organization. An existing LLC without that notice adds it by amendment. Mixing bank accounts, paying one series' bills from another, or titling property in the company's name instead of the series' name are the common ways owners lose the benefit.

Treat each series like its own small business: its own ledger, its own account where your bank allows it, and contracts signed in the series' name.

Source: wyoleg.gov

What a series does not solve

Other states, lenders and title companies do not all treat series the same way, and some will want a separate entity anyway. Federal tax treatment of series is its own question for your accountant. A series LLC is a tool for owners who will keep disciplined records; for one or two assets, separate LLCs can be simpler to explain to a bank.

Source: wyoleg.gov

Setting up series step by step

Put the notice of the limitations on liabilities in the articles of organization when you form, or add it to an existing LLC by a $60 amendment. Write the series terms into the operating agreement, including which assets belong to which series and that the agreement specifically provides for the limitations. Designate each series and pay $10 for each. Then open the books: a separate ledger for each series, with records that identify its assets.

Source: wyoleg.gov

Tell us at checkout

If you plan to use series, tell us when you order so the articles include the notice of limitations and the operating agreement is drafted for series. Tell us how many series you want designated so the $10 per series state fee is added at cost.

Source: sos.wyo.gov

Cost compared with separate LLCs

Three separate Wyoming LLCs cost $300 in state fees to form and at least $180 a year in license tax. One LLC with three series costs $100 plus $30 in series fees to form and, on the state's fee schedule, one annual report with the license tax figured for the company. The tradeoff is the record-keeping discipline the series wall requires.

Source: sos.wyo.gov