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What You Need to Know About Asset Protection and Texas Series LLC

As a business owner you work hard for your money. Many of you have taken the step to protect yourself by forming a limited liability company (LLC) to protect your personal assets, but did you know there’s another step you can take to protect both you and your business?

The second step to protect you and your business is an Asset Protection Program. Why is an Asset Protection Program important? We all know no matter how careful we are, accidents happen. We also know there are people who have no desire to be reasonable when it comes to fairly settling a dispute. This is where Asset Protection comes into play. With an Asset Protection Program you and your lawyer put strategies and legal protection in place to avoid judgment from a law suit before it happens.

Asset protection is our multi-layered approach to protecting your assets in case of liability. Just like a diversifying your investment portfolio protects your investments by spreading the risk of losing your investment; Asset Protection spreads out ownership of your assets to reduce your risk of loss. You can use your existing LLC and/or a Texas Series LLC to create your Asset protection Program.

A Texas Series LLC is a special type of Limited Liability Company. It can be segregated into separate “sub-companies” called “series”. Your assets are held separately in each individual sub-company. Each separate sub-company is insulated from the debts and liabilities of the other sub-companies. Your sub-companies are currently not part of the public filings so you maintain a level of anonymity. Each separate series or “sub-company” can have its own (i.e., different) owners, interest, assets, distribution of profits and losses, and tax treatment.

protecting your assets with an llcWith a Texas Standard LLC your LLC holds all of your business assets. In the event of a lawsuit, the plaintiff would sue the LLC and all of your business assets are at risk.

Texas Series LLC’s were newly created in the 2009 Texas legislative session. With this form of Asset Protection, different series are set up under the parent LLC. Each series is connected to the parent LLC and the other Series LLC’s by contracts, but each operates individually. Only the Series that does business with customers and vendors is at risk.

asset protection with texas series llc

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