How to Form a Delaware Registered Series
The Delaware registered series is the newest type of series that can be formed by a Delaware Series LLC. To form a registered series, you must file a Certificate of Registered Series with the Delaware Division of Corporations. The state filing fee is $90, and you can submit the certificate by fax or by mail. A separate certificate and filing fee must be submitted to the state for each registered series your Delaware Series LLC decides to form.
What Is a Delaware Registered Series?
To understand the nature of a Delaware registered series, you must first know a few things about a Delaware Series LLC. The Delaware Series LLC is a special type of limited liability company (LLC) that can establish or form “series” within itself as a way to segregate the organization’s various assets. A series is basically a division of the Series LLC itself (sometimes called a “Master LLC” or parent organization) that can have their own assets and business purposes.
The individual series of a Series LLC are not truly independent organizations, but they have many of the attributes of independent organizations (including, if properly formed, limited liability protections separate from the Series LLC and other series within it). The Delaware Series LLC business structure basically allows a limited liability company to wall off and protect its assets in case any of its individual series or the parent organization ever gets sued.
You must start a Delaware Series LLC before you can form a registered series, a process that requires submitting a Certificate of Formation to the Delaware Division of Corporations and crafting your organization’s limited liability company agreement to allow for the establishment of one or more series. Furthermore, if you want your registered series to have its own limited liability protections, your Series LLC’s Certificate of Formation must include a special provision, called the notice of the limitation on liabilities of a series, using the following language:
“Notice is hereby given pursuant to Section 18.215(b) of the LLC Act that the debts, liabilities, and obligations incurred, contracted for, or otherwise existing with respect to a particular series of the LLC, shall be enforceable against the assets of such series only and not against the assets of the LLC generally, or any other series thereof, and none of the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to the LLC generally, or any other series thereof, shall be enforceable against the assets of such series.”
There are no formal limitations on the number of series a Delaware Series LLC can form.
What Makes the Delaware Registered Series Unique?
The other types of series available to a Delaware Series LLC (such as the “protected series”) are formed by amending the Series LLC’s limited liability company agreement. As such, they do not qualify as “registered organizations” as defined by the Uniform Commercial Code (UCC), and they cannot receive their own certificates of good standing from the state.
The Delaware registered series resolves these problems because, unlike other types of Delaware series, it is formed by registering with the state and hence qualifies as a “registered organization.” A Delaware registered series can receive a certificate of good standing from the Delaware Secretary of State. The one catch is that the parent organization (the Series LLC itself) must be in good standing with the state for the Delaware registered series to remain in good standing.
The creation of the Delaware registered series, incidentally, is relatively new. The registered series became available through amendments to the Delaware LLC Act that took effect on August 1, 2019.
The Series LLC is a business structure invented in Delaware that has since spread to more than a dozen other states and jurisdictions. Learn the ins and outs of this unusual business entity at Northwest’s Series LLC Guide, or check out our very own Drake Forester’s article Defining the Series LLC at Score.org.
DE Certificate of Registered Series Requirements
Your Delaware Series LLC can add or remove other types of series by amending its limited liability company agreement, but forming a registered series requires filing a separate document called the Certificate of Registered Series and paying a $90 filing fee. A Certificate of Registered Series must be filed with the DE Division of Corporations for each registered series.
The requirements for the Delaware Certificate of Registered Series are simple. The certificate should contain the following information:
- The full name of your Delaware Series LLC
- The name of the registered series
Importantly, the name must be distinguishable from the names of other businesses on record with the Delaware Secretary of State, and the name must begin with the name of your Delaware Series LLC.
Does a Delaware Registered Series Need a Registered Agent?
Yes, but this doesn’t require a separate step at the state level because a Delaware Series LLC and each of its series (including its registered series) can use the same registered agent. If you use a commercial registered agent service and decide to start a Delaware Series LLC, make sure to find out if your provider will serve as the Delaware registered agent for a Series LLC and each of its individual series (some won’t), and get clear about the costs up front! Most commercial registered agent services will charge extra for each series of your Series LLC.
Delaware Registered Series EIN
Should My Delaware Registered Series Get Its Own EIN?
Typically, yes. If your Delaware registered series will operate like an independent company with its own finances, bank account, or employees (and that’s usually the idea behind forming a registered series of a Delaware Series LLC!), the series will likely need to get its own employer identification number (EIN). The same goes for any other series your organization decides to form.
Keep in mind, however, that it isn’t easy to apply for separate EINs for each series. Currently, the IRS will only allow you to submit one EIN application per day, so getting EINs for multiple series might take several business days (depending on the number of series). Luckily, it’s free to get an EIN from the IRS, and you can apply online at the IRS website.
Getting a Registered Series Bank Account
Does a Delaware Registered Series Need Its Own Bank Account?
If your Delaware registered series has limited liability protections separate from the Series LLC itself, it is crucial to maintain separate records and finances, and that typically means maintaining separate bank accounts. Since many banks are unfamiliar with the Delaware Series LLC business structure (not to mention the very new registered series), make sure to call your chosen bank ahead of time and explain your situation as thoroughly as possible, particularly if your purpose is to open multiple bank accounts for multiple series.
In general, you can expect most banks to want the following items from your Delaware registered series (though additional items may be necessary depending on the bank):
- A copy of your Delaware Series LLC Certificate of Formation
- A copy of your Certificate of Registered Series
- Your Series LLC’s operating agreement
- Your Delaware Series LLC’s EIN
- Your Delaware registered series’s EIN
Considering the complexity of the Delaware Series LLC, you may want to bring an LLC resolution to open a bank account that authorizes you (or your representative) to open an account in your registered series’s name. Call ahead to make sure the bank understands your situation and is willing to open a bank account for a Delaware registered series.
The Delaware Annual Tax
Do Registered Series Pay the Delaware Annual Tax?
Yes. Unlike protected series, which get established by amending a Delaware Series LLC’s limited liability company agreement, a Delaware registered series is a registered organization and must pay the Delaware annual tax to remain in good standing with the state.
Luckily, a Delaware registered series isn’t required to pay the hefty $300 annual tax required of its parent organization. The annual tax for a Delaware registered series comes to $75 each year. The $75 annual tax is due by June 1 of each year after the calendar year in which the series was formed.