Owning and operating more than one business is quite a familiar situation in the corporate sector. Even the big players of the real estate market invest in more than one property. But this may create a likelihood of tax related problems for them. To avoid such problems and any legal problems of one business line affecting all others, these business tycoons seek separate ownerships for their businesses. Traditionally, this would mean setting up different business entities for each business or property, which is an expensive method. This paved way for the creation of a new legal entity called The Delaware Series LLC. This aims to solve the problem of a single company owning multiple subsidiaries.
The Delaware Series LLC gets its name from the state where it originated, and still seeks that this be first created in that state but can be registered to do business in any other state. There are a number of benefits of creating a Delaware series LLC. This allows one LLC to institute split-up units, under one roof, with each unit possessing a different management, distinct assets, and incurring stand-alone liabilities. Every year, this detached series of units under a series LLC files but a single income tax return with one filing fee. Separate tax returns are filed in case of new memberships. According to the Delaware decree, the legal charge acquired by one unit does not in case affect the other ancillary units. Further, it also facilitates transfer of assets among related businesses without application of income tax.
Besides benefits, the Delaware Series LLC has a few limitations too. It expects every LLC to have company name. A single property cannot have more than one owner. Further each series is expected to file a separate income tax return.