Despite being a relatively new variation of an LLC business structure, the series LLC has become incredibly popular in the US business landscape. However, due to the fact that it’s still fairly new, the questions “what a series LLC is” and “how to form it” are trite.
To make it a tad bit easier for new business owners to figure out if they need a series LLC, we’ve compiled an easy-to-follow guide on how to start a series LLC in Indiana that covers all the common questions and then some. Read on to find out how it works!
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So, let’s take a look at how to open a series LLC in Indiana from a legal perspective. In general, however, with the exception of a few adjustments, the process is about the same as when forming an LLC.
Before anything else, what you need to do is select a company name. Ideally, you should opt for a name that is easy to remember and that describes what your company’s service is about. Also, it should be something that you personally like.
Other than that, there are a few more naming rules in Indiana to consider:
However, before you attach to any name, make sure to check its availability by doing a quick search on the official Indiana website. You may think that the name you’ve come up with is unique, but there’s no guarantee that it’s not already been taken by someone else.
It may also be a good idea to get an assumed name (known as DBA) for the series LLC if the chosen name is too long and hard to remember. The DBA name can be received by filing with the Secretary of State of Indiana for an additional fee of $35.
The next step is to find a statutory agent for your series LLC. Also known as a registered agent (RA), it’s a business official responsible for receiving documents and communicating with the government on your behalf.
In case you think you need to designate a registered agent for each child LLC, it’s not the case. More often than not, one RA can cover the needs of the entire series, saving you from the need to delegate to multiple representatives.
Now to the question of who can be a resident agent for the series LLC in Indiana. In general, your options are quite numerous. Any resident or a company with a local office in Indiana can qualify as one if they are at least 18 and can work within business hours.
In fact, you can also be your own statutory agent, although it’s probably not the best idea given you’d need to process each cell’s paperwork in addition to your main work.
Other benefits of using a professional RA service provider are listed below:
Unlike some other states, there are two documents that need to be filed to create a series LLC in Indiana. One of them is the Articles of Organization Domestic Master LLC.
It’s a legal document that officially establishes the series LLC registration in IN and is submitted to the Indiana Secretary of State. The information you need to include in it is as follows:
This document can be submitted online, in person, or by mail, and the cost to file it is $250.
In addition to that, you’ll need to prepare and file the Articles of Designation for each child company. Basically, you need to provide the same details as you would when filing the main form, but you will also be required to add the name of your master LLC.
The fee for each form is $30.
Once the documents are sorted, you should acquire an EIN number, but unlike the traditional LLC, make sure you get one for each company in your series. In essence, it is a federal tax ID number that is used to identify your business and is required for tax purposes.
To get an EIN, you can go on the Internal Revenue Service (IRS) website and apply for it by filing an SS-4 form. Getting this number will come at no cost to you.
Drafting an operating agreement isn’t a mandatory requirement of the state, but it’s better to have one nevertheless. This document essentially is a set of the company’s internal rules that describes different aspects of your business.
As a rule, this document sets out the obligations and voting rights of each member of an SLLC and explains how the profits from your business will be distributed across the entire series.
Apart from this, it may also include information on the management process of your SLLC:
As mentioned, this document isn’t mandatory, but it is legal, meaning it can be used for various business-related functions. In fact, some banks may actually ask you to show it when applying for a loan.
Besides, a good operating agreement can serve as a tool to attract partners and investors to your business who are more likely to supply funds to a business with the potential for return.
Basically, it’s all in the name. Unlike an LLC, a series LLC (also known as an SLLC) is a collection of child ‘cells’, branching off from a master limited liability company.
The distinct advantage of this form of a business entity is that each series of an LLC is financially insulated from the others, meaning if there’s a lawsuit against one of them, it won’t affect the entire series.
By and large, starting a series LLC is pretty much like starting several ventures, each for its own business purposes, which will operate independently of each other and have liability protection.
Not all states recognize a series LLC, but Indiana does, and if you’re looking into forming a series LLC in IN, it’s definitely a great place to get started.
The series LLC cost in Indiana may vary greatly depending on how many series you create, what services you use, and how much work you decide to delegate to third parties. That said, there are two types of payments to consider:
If you’re wondering how much is a series LLC in IN, here’s an overview of the costs that starting and maintaining a business entails (compulsory and optional included):
|Articles of Organization Domestic Master LLC fee||$250|
|Articles of Designation for Your Series LLC fee||$30 per each LLC in the series|
|DBA fee (optional)||$35|
|Registered agent fee||$0-$125|
|Certificate of Good Standing fee (optional)||$26|
|Certified copies of documents||$15 if ordered by mail and 16$ if ordered online|
|Business Entity Report fee||$50 if submitted by mail and $32 if submitted online|
|Articles of Amendments fee (optional)||$30|
|Articles of Dissolution fee (optional)||$30 if submitted by mail and $20 if submitted online|
Unlike the Articles of Organization Domestic Master LLC, a Certificate of Good Standing isn’t a necessary document, but there may be a time when you’d need to obtain it.
This document, also known as the Certificate of Existence, serves as proof that your company is not going through a dissolution process and is properly maintained, and can be used by banks to recognize your SLLC as authorized.
In general, once you get all your forms signed, your series LLC is officially created. However, forming a business entity involves more steps than that. So, when you file a series LLC in IN, you should take care of a few more tasks to move your company forward.
As a formal business entity, you should look into creating a bank account to manage your business finances. Having a separate business account not only makes it easier to track tax filings but also ensures liability by separating your business gains from personal assets.
However, take note that each child series of your series LLC will need a dedicated bank account. It’s the only way to ensure protection from liabilities should any other LLCs in your series be sued by creditors.
A bank account can be opened with any bank of your choice by providing the following documents:
Another step is to find an accountant who will keep track of all expenses across the series LLC. Of course, you can do this job yourself, but it’s highly recommended to entrust accounting to a professional.
The role of an accountant in business is hard to underestimate. It’s a key figure responsible for creating a budget and carrying out proper accounting procedures necessary to keep your business in good standing and prevent any fines.
In addition, accountants can provide useful financial advice. By evaluating business strategies and the profitability of a product or service, they can help your series LLC take the best direction while minimizing expenses.
Plus, they can help prepare and file official forms, including income reports and tax returns.
While series LLCs in IN do not need a general business license, there are many other permits and licenses that may be required for companies in certain industries, so it’s vital to check if you need any of them before registering your business.
Unfortunately, the state of Indiana doesn’t provide an accurate list of industries that require a business license, and you can only get an idea of whether yours is eligible by looking up the Indiana Business Owner Guide.
To play it safe, you may want to get in touch with a local law firm or an authorized attorney who’d tell you exactly what permits and licenses your business must have to legally operate in the state.
In Indiana, unlike most other states, there are no annual reports. Instead, you’d be required to file the Business Entity Report every two years. In essence, though, it’s the same type of document, outlining the changes in the structure of your business.
This report must be sent for the entire series, not each LLC, and the cost is $32 or $50, depending on whether you choose to submit it online or by mail.