SEGREGATING ASSETS AND LIABILITY JAY BUTLER
SEGREGATING ASSETS
AND LIABILITY
By Jay Butler
s
a
‘Series’
Limited
been
construction and fund raising.
Liability Company akin to
successfully implemented internationally
However, many questions have
putting all your eggs in
with ‘Segregated Portfolio Companies’
since arisen on ‘how to use’ a
one basket or can a Series
(British Virgin Islands and Belize)
Series LLC with regards to banking,
LLC truly provide asset protection
and Protected Cell Companies
documentation and taxation.
through
(Republic
I
the
segregation
of
subsidiary assets and liabilities?
Originally designed to assist
Such
a
strategy
of
has
Seychelles)
for
insurance companies and other
A Series LLC consists of a
industries servicing large quantities
‘master’ company and a “series”
of related clientele.
of ‘subsidiary’ companies, which
investment companies in the
may conduct unrelated business
mutual fund industry avoid a
The method of shielding large
activities with differing ownership
multitude
of
SEC
filings,
institutions from mass claims arising
interests. Of the thirteen states
Delaware
introduced
special
from catastrophic events was then
which currently have legislation
interest legislation in 1996 to
brought to average individuals
enacted for a Series LLC, only
enable one company to act as an
engaged in common business
Illinois requires the subsidiaries
‘umbrella’ for the activities of all
activities with varying degrees of
(or series) to be registered with
their individual client funds.
risk such as real estate investing,
the Secretary of State. All other