The limited liability company (LLC) has been an incredibly popular business structure for decades, but in the grand scheme of things, it’s still a relatively recent addition to the American business landscape.
There are actually still new variations of the LLC popping up across the country, with the most popular one being the series LLC.
The series LLC is only available in certain states, including Indiana. A series LLC is a collection of LLCs that are grouped under one parent LLC. This enables businesses to separate different parts of the company into separate LLCs, allowing them to isolate the liabilities of each segment from the others.
Because the series LLC is still relatively new in some states, we get a lot of questions about what exactly the series LLC is, and how you can form one. That’s why we decided to write these articles, which break down how the series LLC formation process works in each state.
If you’re interested in forming a series LLC in Indiana, read on to find out how it’s done.
That said, if you’re looking for a time-tested way to protect yourself and personal assets as a business owner, the traditional LLC is the way to go. You can either form it yourself or through an online service — which you can learn more about via our LLC service reviews.
What Is a Series LLC?
Let’s start by briefly covering what a series LLC actually is. In general, a series LLC is exactly what it sounds like ― it’s a collection of LLCs that operate under the umbrella of a master LLC.
While each LLC in the series is part of the larger company, this business structure also keeps each LLC financially insulated from the others. In theory, this means that a lawsuit against one of the LLCs should have no effect on the others in the series.
Each LLC in a series has the same limited liability protections that a standard LLC has, meaning that if you’re sued, creditors can only come after your business assets rather than pursuing your personal possessions.
While a series LLC does still protect your personal car, house, bank accounts, etc., it also protects the other LLCs in the series from the lawsuit. In other words, creditors can only pursue the assets of one LLC, rather than the entire series.
How Can I Form a Series LLC in Indiana?
Choose a Name for Your Series LLC
The first step to forming any type of LLC is to first select a name for your new business. You should choose a name that is memorable, and also one that briefly describes what your business does, or what your organization stands for. You will also need to run a business name search to make sure your chosen name is available in Indiana, and isn’t already being used by another company.
Also, you’ll need to include either the phrase “limited liability company” or the letters “LLC” in your business name. Finally, you cannot include any terms that refer to specific business types ― like “bank” or “hospital” ― unless you actually run one of those businesses, and you also can’t use any words that refer to other business types ― such as “incorporated” or “inc.”
Finally, it’s important to note that in Indiana, each segment of your series LLC must include the parent LLC’s name. However, each LLC in your series must have a different name from the others. For example, if your parent LLC is called “Scott’s Foods,” and you want to differentiate your fine-dining LLC from your fast-casual LLC, you could name these segments “Scott’s Foods Dining LLC” and “Scott’s Foods Fast LLC.”
For more info on naming an LLC ― whether that’s a series LLC or a traditional LLC ― check out our comprehensive guide to naming an LLC.
Designate a Registered Agent
Next, you’ll need to choose a registered agent for your series LLC. The registered agent must have an office located in Indiana, and they must be available to receive document deliveries from the state during all standard business hours.
You don’t need to worry about designating different registered agents for each segment of the LLC, as you can have the same registered agent for every LLC in the series if you want to.
Prepare and File the Articles of Organization Domestic Master LLC
In some states, you can use the same document to form a traditional LLC and a series LLC, but in Indiana there are two different documents. The one you’ll want to use to create a series LLC is called the “Articles of Organization Domestic Master Limited Liability Company.”
The information you need to include in this document includes the name and principal office of your business, information about your registered agent, your plans for a potential dissolution process, the managerial structure of your series LLC, and the signature of your LLC organizer.
The cost to file this form is $250, and you should submit your payment when you file the Articles of Organization Domestic Master LLC form with the Indiana Secretary of State’s Business Services Division.
Prepare and File the Articles of Designation
In addition to the Articles of Organization Domestic Master LLC, you will also need to file an Articles of Designation form for each LLC in your series. This form indicates the name of your master LLC, the name of the LLC you’re filing the Articles of Designation for, the managerial structure of this LLC segment, guidelines for amending or dissolving the LLC, and the signature of your LLC organizer.
Each of these forms costs $30 to file, and you can submit them to the Indiana Secretary of State’s Business Services Division.
Acquire an EIN
Next, you should obtain a federal tax ID number known as an Employer Identification Number (EIN) from the Internal Revenue Service for each LLC in your series. The EIN is essentially a Social Security Number for your business, as it is a nine-digit numerical code that you can use to identify your business on tax forms, and it also helps you open business bank accounts and hire employees.
It’s quite easy to get an EIN from the IRS. All you need to do is fill out the free form located on the IRS website, and you’re good to go. You will receive your number immediately upon filing.
Draft a Series LLC Operating Agreement
The state of Indiana does not actually require series LLCs to have an operating agreement, but it is still strongly recommended that you create one for your business. The LLC agreement is a vital document, because it describes many aspects of how your series LLC will operate.
In this agreement, you’ll outline what the different segments of your series LLC are, indicate the roles of each member/owner, detail the owners’ voting rights, and explain the financial contribution and allocation plans.
You should also indicate whether you want your business to be managed by its members or by a manager, discuss how an owner can be replaced if necessary, and outline a dissolution procedure if you ever need to close up shop.
Create a Financial Infrastructure
It’s crucial for any LLC to open a business bank account, as this helps you maintain the separation of personal and business finances that is required of all formal business entities. However, there’s an extra layer to this step for series LLCs, as you’ll need to open a bank account for the series’ parent LLC, as well as for each of the separate LLC segments under its umbrella.
If you fail to open a separate bank account for each segment, you will run the risk of losing the isolated liability of each LLC in the series. You need to be able to prove that these segments are truly separate if you want to maintain the liability shields between them.
In addition, this would be a good time to either hire an accountant or purchase accounting software for your series LLC. For traditional LLCs that don’t have particularly complex accounting needs, it’s usually sufficient to use accounting software, but a series LLC is a bit more complicated, and we therefore prefer hiring an accountant to make sure everything is done correctly.
Obtain Licenses and Permits
There is no general business license required in the state of Indiana, but there are plenty of licenses and permits that are required for businesses in certain industries. Unlike many other states, Indiana does not provide a convenient list of every business license required in the state.
There is some basic information on the In.gov Business Owner’s Guide — just click on the “Specific Licensing & Permitting Issues” link on the upper-right corner of the screen. However, they specifically note on this page that “this is not intended to be a complete listing.” With this in mind, you’ll need to contact any relevant state agencies that pertain to your line of business, to make sure you’re not missing any licenses or permits.
Also, keep in mind that there are federal licenses for some industries, and you may also need to acquire licenses in your county or municipality.
Understand Maintenance Requirements
In Indiana, all LLCs (whether traditional or series) are required to file the state’s Business Entity Report once every two years. This report is how you keep the state updated regarding any changes made to your business since the previous filing. In general, you’ll need to inform them of a change to your business name or address, the name or address of your registered agent, and any changes to your ownership group.
It is not necessary to file a Business Entity Report for each LLC in your series, as the state will accept one such report for the entire series.
Can I Hire Someone to Form My Series LLC?
When forming a series LLC, you have three options. You can tackle the DIY route, you can hire an attorney, or you can use a reputable online business formation service. The DIY option can be quite the hassle, and hiring a lawyer is obviously very expensive. That’s why we prefer hiring a business formation service.
These companies provide convenience and peace of mind that you don’t get from the DIY route, and they’re also much cheaper than hiring a lawyer to form your business. However, compared to the dozens of services that form traditional LLCs, there aren’t nearly as many companies offering series LLC formations.
Fortunately, one of our favorite LLC formation providers does offer series LLC formations, and that’s Northwest Registered Agent. They will not only form your series LLC, but their industry-best registered agent service (included at no extra charge) includes local scanning of every document they receive on your behalf. They also have the best customer support available for LLC formation services.
The process of forming a series LLC in Indiana isn’t too terribly different from the formation process for a standard LLC.
However, you do need to make sure that you submit the Articles of Organization Domestic Master Limited Liability Company form rather than the traditional LLC version of this form, and also file an Articles of Designation form for each individual LLC in your series.
At the end of the day, if you want to skip some of the hassles and worries that come with forming your own Indiana series LLC, you always have the option to hire Northwest Registered Agent to handle it for you.
We hope this article helped you develop your understanding of how to form a series LLC in Indiana!