Written by: Eliana Cotton & Peter Dzuba, Esq.
On June 20, 2025, Florida enacted CS/SB 316 which, among other amendments, finally authorizes Florida limited liability companies to establish “protected series.” See Fla. CS/SB 316 (2025). With this legislation, Florida joins 24 other jurisdictions (including Puerto Rico and District of Columbia) that recognize series LLCs. Beginning July 1, 2026, both newly formed and exiting Florida LLCs may create “protected series” (i.e. LLC-equivalent silos of limited liability which may hold assets and business operations), by filing a “protected series designation” with the Florida Department of State. Unlike Delaware and Wyoming where individual series can be formed by contract alone, Florida requires this additional state filing. Despite this extra procedural step, Florida’s series LLC framework offers the same core advantages, namely cost efficiency, flexibility, and clear liability segregation, making it a powerful new tool for entity structuring and liability protection.
The Context In Which Series LLCs Shine
To appreciate the value of the Series LLC, it helps to first understand the strength of the holding company structure, a framework in which a parent entity owns one or more subsidiaries. As businesses grow and acquire assets, they also accumulate risk. When all assets and operations sit in a single entity, a liability arising from one business line or asset can jeopardize the entire enterprise.
Thus, separating operations and assets into distinct liability silos, typically through individual LLCs, prevents this “spillover” effect. A creditor of one LLC can reach only that entity’s assets, leaving the others protected. Consequently, prudent companies (and investors) structure their affairs so that each business line or major asset sits within its own LLC.
Consider, for example, a personal injury attorney who reinvests his earnings into several Florida rental properties. Having seen how a single slip-and-fall claim can exceed insurance limits, and recognizing that all assets within one LLC are exposed to its liabilities, he avoids placing every property under one entity. Instead, he forms a separate LLC for each property, effectively isolating risk. Before long, his portfolio looks something like this:
Although Diagram 1 illustrates how separate LLCs can isolate property-specific liabilities, preventing one LLC’s exposure from “contaminating” another, this structure is still imperfect, as it remains vulnerable to two key risk vectors:
Risk Vector 1: Inside Liability
When an individual personally owns 100% of an LLC’s membership interests, they become a convenient target for a judgment creditor pursuing the LLC’s unpaid obligations. In such cases, post-judgment counsel may subpoena bank records (including under Fla. R. Civ. P. 1.560(b)), trace transfers to the member, and pursue proceedings supplementary or a supplemental complaint (see Fla. Stat. § 56.29), alleging fraudulent transfer, undercapitalization, commingling, or veil-piercing to reach the member’s personal assets.
Even if unsuccessful, this process is intrusive, costly, and stressful, often prompting settlements under pressure. For that reason, it is generally poor practice for individuals to hold LLC interests directly in their own names.
Risk Vector 2: Outside Liability
The opposite risk arises when the individual incurs personal liability unrelated to the LLC’s business, for example, causing a car accident that results in a $1 million uninsured judgment. In that case, a creditor can locate and seize the debtor’s LLC interests. Under Olmstead v. F.T.C., 44 So. 3d 76 (Fla. 2010), a single-member LLC interest in Florida is subject to foreclosure.
Since, as the saying goes, “an LLC can’t get into a car accident,” this exposure can be mitigated by placing ownership of each operating or asset-holding LLC under a holding company, rather than the individual holding them directly.
To mitigate Risk Vector 1, ownership of each subsidiary LLC should be structured through a holding company, as illustrated below:
The protection can be strengthened further by addressing Risk Vector 2. If ownership of the holding company is restructured from sole individual ownership to a 50/50 split between two members, foreclosure of a debtor’s membership interest is no longer permitted. See Fla. Stat. § 605.0503(6). In that case, a creditor is limited to a charging order, and thus unable to seize or control the LLC interest, compel distributions, or participate in management. Meanwhile, the members remain free to reinvest profits into new ventures while the creditor watches from the sidelines. Thus, a prudent company anticipating these risks often adopts a protective structure resembling Diagram 3 as follows:
There are many ownership structure options at the holding-company level that provide even greater protection than a standard multi-member LLC. These fall within the broader field of liability planning, which is beyond the scope of this post. For present purposes, it’s enough to note that the holding-company framework described above already delivers significant protection, a time-tested structure that has endured for decades and ultimately inspired the first Series LLC statutes in other states.
Historically, implementing the structure shown in Diagram 3 required forming and maintaining multiple Florida LLCs: one parent entity and separate subsidiaries for each asset or business line. With the passage of CS / SB 316, that complexity and cost are dramatically reduced. The same protective framework can now be created with a few simple filings and a single annual report covering the entire structure
Who Benefits Most from the Florida Series LLC
A. High-Net-Worth Business Owners Who Structured Their Companies Poorly at Inception, Often Without Realizing It
As noted above, a multi-member LLC in Florida enjoys charging order protection under Fla. Stat. § 605.0503(6), which prevents a creditor from seizing ownership or control of the company. Corporate stock, however, receives no such protection.
It’s common for high-net-worth entrepreneurs to organize their businesses under a corporation, often at the advice of a CPA who views an S-corporation as functionally equivalent to an LLC taxed the same way. But the difference is critical: tax treatment may be similar, yet creditor protection is not.
If a personal creditor obtains a judgment against a shareholder, that creditor can foreclose directly on the stock, thereby taking ownership of the holding company, and with it, every downstream subsidiary, asset, and operating business. In other words, a single personal lawsuit can jeopardize an entire enterprise built over decades.
By contrast, if the holding company is a multi-member LLC, the creditor’s remedy is limited to a charging order, a lien on distributions only, not ownership or control. The business keeps operating, profits can be reinvested, and management remains intact.
While startups seeking venture capital may need a corporate form to satisfy investor requirements, most closely held businesses are far better served by an LLC structure, particularly one enhanced through Series LLCs or multi-member arrangements, which provides stronger protection, greater flexibility, and cleaner risk isolation than a traditional corporation ever could.
B. Series LLCs Offer Investment Fund Sponsors a Precise Tool for Compartmentalizing Functions and Risk
For investment managers (including real estate syndicators) the Series LLC provides a flexible framework for precisely isolating functions, assets, and liabilities within a single entity structure.
- Separation of Managerial and Advisory Functions
Sophisticated fund sponsors often reduce exposure by separating the General Partner (GP) role from the Investment Advisor (IA) function. If liability arises from the IA’s conduct, that risk should not extend to the GP’s assets. Traditionally, this required maintaining two separate entities, an expensive and administratively burdensome approach. Under Florida’s new Series LLC framework, these distinct liability silos can be created and maintained with minimal cost and paperwork.
- Isolation of Sponsor’s Passive Ownership
The Series LLC also allows sponsors to carve out the GP function itself, eliminating the risk that arises when the manager is also a direct owner of the fund entity. Separate GP and IA series can each serve the property-specific series below them, ensuring that funds attributable to passive investors flow securely to project sponsors while each layer remains insulated from the liabilities of the others.
The resulting structure appears as follows:
In addition to mitigating risk, Series LLCs offer several important advantages. They allow seamless segregation of liabilities across a fund’s investments, each with its own risk profile. They also enable the creation of dedicated silos for separately managed accounts with investor-specific terms that extend beyond what a side letter could achieve. Finally, they provide a simple, transparent mechanism for investors to co-invest in specific opportunities without participating in others.
C. Value for Product and Service Businesses, Illustrated Through Retail
The Florida Series LLC offers significant advantages for virtually any product- or service-based enterprise. For retail and consumer businesses, it provides a modern legal framework that blends operational flexibility with strong asset protection, an ideal structure for brands managing multiple product lines and locations.
- Protecting Intellectual Property and Goodwill
From the moment a retailer signs its first commercial lease, landlords commonly require a security interest in “all assets” of the business, encumbering not only tangible property but also key intangible assets such as brand names, logos, trademarks, and product designs, together with the goodwill associated with them. By housing these intangible assets and related goodwill in a dedicated series, they remain insulated from operating risks and beyond the reach of landlord liens or store-level disputes.
- Segregating Product Lines and Liabilities
As a business grows, new product lines introduce distinct operational, financing, and product liability risks. A Series LLC allows each line to reside within its own protected series, ensuring that liabilities tied to one product line cannot contaminate others.
- Facilitating Scalable Growth and Franchising
When expanding through new stores or franchise locations, each outlet can be established as a separate protected series. The intellectual property series can then license the brand and related assets to each operating or franchise series, preserving centralized control while containing location-specific risk.
CONCLUSION
The Florida Series LLC marks a major step forward in how businesses, investors, and fund managers can structure their affairs for efficiency and protection. By enabling multiple protected “silos” within a single entity, it delivers the sophistication of Delaware’s series framework in a cost-effective, domestically recognized form. Whether used by real estate sponsors seeking project-level insulation, fund managers aiming to streamline risk and investor participation, or business owners modernizing their asset protection strategies, the Series LLC offers a flexible, scalable, and practical solution. With the law taking effect in July 2026, proactive planning now will position clients to capture its full benefits: simpler governance, lower costs, and a stronger foundation for growth.
Peter Dzuba is an attorney at Barakat + Bossa PLLC. He advises clients on complex corporate transactions, including mergers and acquisitions, financings, fund formations, and regulatory compliance. Peter brings a multifaceted background in corporate law, immigration, and cross-border investments. He may be reached at pdzuba@b2b.legal.
Eliana Cotton is a law clerk at Barakat + Bossa PLLC and a third-year law student at the University of Miami School of Law. Her interests lie at the intersection of business, real estate, and emerging regulatory frameworks, with a focus on securities regulation, cryptocurrency, and fashion law. She may be reached at ecotton@b2b.legal.
This post is intended to provide you with general information regarding Series LLCs in Florida, yet its content does not constitute specific legal advice. Please reach out to us directly if you would like our attorneys to assist you.
