What is an Arkansas Series LLC?
In 2019, the Arkansas legislature adopted Arkansas’ Uniform Protected Series Act (the “UPSA”) which is codified at Ark. Code Ann. §4-41-10.
A Series LLC is the concept of having one main “umbrella” LLC that can then be divided into separate parts called “protected series.” These protected series can conceptually be thought of as subsidiaries to the main LLC. Each protected series can own its own property, run its own business activity, have its own manager(s) and member(s), and can be legally protected from the debts and lawsuits of the other series if set up correctly.
For example, a real estate owner could place each rental property into its own protected series that are all under the main LLC. If there is a lawsuit involving one property, the others may be shielded from liability.
How Liability Protection Works.
Arkansas’s Uniform Protected Series Act allows each protected series to have its own liability protection, but only if the business keeps clear and accurate records. Assets must be clearly assigned to the correct series. Poor recordkeeping can weaken or destroy the legal protection. If records show that an asset belongs to a particular series, that asset is only available to satisfy the obligations of that series, not the others.
Filing Requirements.
Each protected series must be officially registered with the Arkansas Secretary of State and must include “protected series” or “PS” in its name. The Series LLC must also report its protected series each year when filing franchise tax reports.
Is a Series LLC Right for You?
While a Series LLC offers compelling advantages for businesses with multiple investments, the statutory framework is complex, and the legal and tax implications are nuanced. This is a very new concept in Arkansas law, and as such, it is important to speak with an attorney to ensure it is structured correctly and fits your specific goals.
Located in Batesville, Melbourne, Heber Springs, and Mountain View, Arkansas, and serving all of Arkansas, Reeves Law Firm stands ready to handle any civil, estate, family law, guardianship, personal injury, probate, or any other litigation matters that may arise.
Reeves Law Firm primarily serves Independence County (Batesville), Jackson County (Newport), Sharp County (Ash Flat, Highland, Cherokee Village), Lawrence County (Walnut Ridge), Cleburne County (Heber Springs, Greers Ferry, Fairfield Bay), Izard County (Melbourne), Stone County (Mountain View), White County (Searcy), and Baxter County (Mountain Home).
Give us a call in Batesville, Arkansas, at (870) 793-0021
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