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Series LLCs for Real Estate Investors

Posted on in Real Estate Law

b2ap3_thumbnail_llc-or-corporation-Illinois_20171130-190738_1.jpgSeries LLCs for Real Estate Investors

Naperville, Bolingbrook, and Plainfield Business and Real Estate Attorneys in Will County

What is a Series LLC?

A Series LLC is a type of business entity in Illinois which has the flexibility structure of a partnership and limited liability protection for the business owner(s). Unlike a typical LLC, a Series LLC authorizes additional LLCs to be issued under the umbrella of the Series LLC. The benefit of this arrangement is additional asset protection for the real estate investor at a lower cost structure than purchasing each LLC from the Illinois Secretary of State.

A Limited Liability Corporation (or otherwise known as an LLC) differs from a Corporation because it has flexibility unlike a S corporation. A corporation generally requires only one (1) type of stock structure and does not allow the shareholders to negotiate the profits and losses in a manner that deviates from their shares of ownership of the corporation. For example, an owner of an LLC may have a 15 percent ownership interests in the LLC and have twenty (20) percent of the profits of the LLC during Year 5. This flexible arrangement is not possible with a corporation.

Tax Structure of a Series LLC

Naperville, Bolingbrook, and Plainfield Business and Real Estate Attorneys

A Series LLC and a LLC have the same tax structure as each other. A Series LLC is characterized as a Pass-Through Entity, which means that each member or owner of the Series LLC pays taxes based upon their individual tax. A Pass-Through Entity reduces the “double taxation” of a Corporation. An S corporation and LLC both have Pass Through Entity Tax Treatment because the entity or the Series LLC does not pay a tax. Whereas the member or individual owners pay taxes and put it on their individual 1040 tax return or on their appropriate Schedule.

Robertson Legal Group, LLC has offices in downtown Joliet and South Naperville and we often work with real estate owners, investors, and real estate developers that live in or around the Joliet area such as Plainfield, Shorewood, Bolingbrook, Romeoville, Mokena, New Lenox, Frankfort, Crest Hill, Rockdale, Wilmington, Beecher, Minooka, and Channahon, Illinois. A Series LLC is beneficial for real estate owners and developers when they own multiple real estate properties. Typically, a business or real estate attorney wants their client to set up individual LLCs for different real estate properties. Practically, this legal strategy can be expensive because each LLC costs $500 plus legal fees. With a Series LLC, the costs of each additional LLC are $50. Plus, with individual LLCs there is the additional costs of annual reports. With a Series LLC, there is only one annual report that is due on a yearly basis versus one annual report per LLC. This is a significant savings to real estate owners and investors.

Series LLC and Real Estate Attorneys

Naperville, Bolingbrook, and Plainfield

In conclusion, Robertson Legal Group, LLC is particularly qualified to assist you with your real estate, business, and asset protection legal goals. Sean Robertson is Managing Partner of Robertson Legal Group, LLC and he has a strong advanced taxation, business, and asset protection background which is invaluable for real estate owners, investors and builders including construction owners. Robertson Legal Group, LLC has offices in South Naperville, which is near Oswego, Aurora, Lisle, Darien, Warrenville, Bolingbrook, Romeoville, and Joliet. Our South Naperville Office may be reached at 630-780-1034.

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