Feb25

Your Limited Liability Company is About to Become Less “Limited”

Chiumento Law Limited Liability Company Blog

Coming in with a July 1, 2026, effective date is what is called as the Uniform Protected Series Provisions to Florida’s limited liability company statutory scheme. It is a big one. For the first time, Florida will allow Protected Series LLCs.

What Is a Protected Series LLC?

A Protected Series LLC allows a single “parent” limited liability company to create multiple internal protected series. Each protected series functions like a semi-separate entity with its own:

  • Assets
  • Liabilities
  • Members
  • Managers
  • Business purposes

The key innovation is internal liability protection (often called “horizontal” shields): Debts, obligations, or liabilities of one protected series generally cannot reach the assets of the parent LLC or other protected series, provided statutory requirements for segregation are met.

Key Features of the New Law

Here are the core elements of Florida’s Protected Series LLC framework:

  1. Formation
    • A Florida LLC can become a series LLC by including authorization in its articles of organization and operating agreement.
    • To establish a specific protected series, file a Protected Series Designation with the Department of State.
    • Each series name must include the parent LLC’s name plus an identifier like “Protected Series,” “P.S.,” or “PS.”
    • Unlimited number of series allowed.
  2. Liability Shields
    • A protected series is treated as a distinct “person” for liability, UCC, and certain other purposes.
    • Assets of one series are insulated from claims against the parent or other series.
    • Strict record-keeping and segregation of assets/obligations are required to maintain protections.
  3. Powers and Governance
    • Each series can have its own members, managers, and business purpose.
    • Series can sue/be sued in their own name.
    • The parent LLC’s general powers extend to series unless limited.
  4. Enforcement of Judgments
    • Judgments against the parent LLC or one series generally cannot be enforced against assets of another series (with narrow exceptions).

Practical Benefits and Common Use Cases

The structure offers significant advantages for certain businesses:

  • Real Estate Investors — Hold multiple properties (e.g., one per rental house or commercial building) in separate series to isolate risks from lawsuits or tenant issues.
  • Multi-Venture Entrepreneurs — Operate different brands, lines of business, or startups under one umbrella.
  • Asset Protection — Segregate high-risk activities from safer ones.
  • Intellectual Property Holding — Dedicate series to specific IP portfolios.
  • Family Wealth Planning — Create series for different family branches or investment goals.

This reduces formation/maintenance costs compared to creating dozens of separate LLCs (one filing fee for the parent, lower ongoing fees).

Challenges and Compliance Requirements

To preserve protections, businesses must:

  • Maintain separate books, records, and bank accounts for each series.
  • Avoid commingling assets or funds.
  • Clearly document allocations in the operating agreement.
  • File required designations/amendments with the state.

Failure to comply risks “piercing” the shields, exposing assets across series.

Tax treatment varies — series LLCs are typically treated as one entity for federal taxes unless elected otherwise but consult a tax advisor for Florida-specific implications.

Looking Ahead

As of January 2026 (pre-effective date), Florida businesses can plan restructurings, draft updated operating agreements, and prepare for July 1, 2026, filings. The change enhances Florida’s reputation as a top destination for entrepreneurs.

 

If you’d like to discuss this further, our attorney Eric Sloan would love to assist. Please contact our office to make an appointment.

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