Due to the H.B 3609 in 2019, banks may continue to hesitate to open a bank account for a protected series without submitting a registered certificate accepted at the district level. Since H.B 3609 came into effect, we have advised many customers on this update to the law, and while most banks recognize this change and continue only with a name certificate filed with the Texas Minister of Foreign Affairs, we have met with some banks that are resisting this update. 1) consider the assets associated with this series separately from other assets of the Company or other series; Let`s go back to the main distinction between a traditional LLC and an LLC series. Assuming there is a foreclosure for a Series A property, and there is a default of foreclosure (i.e. the property sells for less than the amount owed to the lender). The lender then complains and recovers a default judgment. Assuming that the serial company and its operations were properly structured, the verdict would apply only against Series A assets, not Series B, Series C or the assets of the entity as a whole. This is not the case for a traditional LLC that maintains its properties in a pool of collective risk. In itself, this is a compelling reason to create an LLC series and not a traditional LLC. Good leadership with Master LLC and individual series is both necessary and essential. In accordance with Section 101.601 (b) (1) of the TBOC, protected series insulation is granted only if “records held for these specific series take into account the assets related to this series [of the other assets of the entity or another series” are separated.
In addition, Section 101.603 (b) of the TBOC states that records must be kept “in such a way that series assets can be appropriately identified by a list, category, category, quantity or formula or calculation or allocation procedure.” In short, the title company`s employee lawyers ordered the real estate from “XYZ, LLC” instead of “123 Main St., a protected series of XYZ, LLC, a Texas limited liability series, etc.” No one had this error until almost three years later. Texas does not issue a general national license for all businesses, but many types of businesses and professions must obtain a state license. If individual series from your Texas Series LLC participate in activities that require a license, they may also need to apply. For example, if your Texas Series LLC or one of its series sells goods or services, a Texas sales tax authorization is required. Although we were able to resolve the situation and ensure that the ten objects commit exactly each protected series, the client potentially risked the ten properties in a lawsuit. When the real estate investor operates his or her own traditional LLC as a management company, each potential applicant is contractually bound only with the management company; The LLC Series, which owns the property, does not participate in an agreement between the applicant and management LLC if it is properly drafted.