QUESTION
Can a 3 member LLC be the 100% owner of a single member LLC?
Asked on Feb 11th, 2014 on Corporate Law - Texas
More details to this question:
We are trying to set up a holding company (an LLC) with our partnership group based on ownership, and that entity will be the 100% owner of each retail "location" which is its own single member LLC. Is that legal? We currently have one location as a 3 member LLC formed last year.
1 ANSWER
Wills and Estate Planning Attorney serving Sugar Land, TX
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Law Offices of Kimberly D. Moss, PLLC
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What you are describing sounds like an arrangement called a series LLC. In Texas, it is perfectly legal to arrange companies as series LLCs where one or more umbrella companies own other companies in whole or in part. The Business Organizations Code Chapter 601 is the law that made Texas one of the few states that legally recognizes this business structure. For a long read on the pros and cons of series LLC, please go here:
http://www.mondaq.com/unitedstates/x/89858/tax+authorities/The+Texas+Series+LLC+Sophisticated+Planning+Tool+Or+Trap+For+The+Unwary
Answered on Feb 12th, 2014 at 10:33 AM