How an Ohio series LLC works

Does Ohio allow series LLCs?

Yes. Ohio's Revised Limited Liability Company Act, Chapter 1706 of the Revised Code, includes a set of sections on what the statute calls "separate asset series," running from ORC 1706.76 through 1706.7613. The act was enacted by Senate Bill 276 of the 133rd General Assembly, and on and after February 11, 2022, Chapter 1706 governs all Ohio LLCs (ORC 1706.83). The series sections carry the same enactment.

The idea is simple. One LLC is formed with the Secretary of State. Inside it, the operating agreement sets up compartments, each called a series, that hold their own assets and carry their own obligations. If the statutory conditions are met, a creditor of one series cannot reach the assets of another series or of the LLC generally.

What Ohio's version does not do matters just as much, and this guide calls those limits out as it goes. A series is created by private agreement, not by a state filing, and the statute does not give a series its own entry on the Secretary of State's business record.

How a series is created in an Ohio LLC

A series exists because the operating agreement says so. ORC 1706.76(A) lets an operating agreement establish, or provide for establishing, one or more designated series of assets. Each series must meet two requirements:

• It has separate rights, powers, or duties with respect to specified property or obligations of the LLC, or the profits and losses tied to them, or it has a separate purpose or investment objective, or both.
• At least one member is associated with it.

A series may carry on any activity, for profit or not (ORC 1706.76(B)).

There is no Ohio form for creating a series and no state fee per series. Adding a fourth series to an LLC that already has three is done by following the method the operating agreement sets, which could be a member vote, a written designation by a manager, or whatever the members agreed. Because the operating agreement controls so much here, read our guide to the Ohio LLC operating agreement alongside this one.

The three conditions for liability separation between series

The reason to use series is ORC 1706.761(A). When it applies, debts and obligations incurred for a series are enforceable only against that series' assets, and debts of the LLC generally or of any other series cannot be enforced against that series' assets.

That protection is conditional. ORC 1706.761(B) applies it only if all three of these are true:

An operating agreement cannot waive these conditions (ORC 1706.08(C)). Miss one, and the statute does not separate the series' liabilities.

What counts as separate records

ORC 1706.762(B) treats the records requirement as met if the series' assets can be reasonably identified, by specific listing, category, type, quantity, a formula or allocation such as a percentage, or any other method that objectively determines them. Assets can be held directly or indirectly, in the series' name, in the LLC's name, through a nominee, or otherwise (ORC 1706.762(A)). In practice, that means a separate ledger, and usually a separate bank account, for every series, and title documents that make clear which series owns what.

The articles statement can come first

ORC 1706.763 makes the articles statement valid even if no series has been created yet, and even if it refers to a specific series. You can put the statement in the articles at formation and add series later.

What Ohio's series LLC law does not provide

Owners coming from states with more developed series statutes sometimes assume features Ohio does not have. Based on the text of ORC 1706.76 to 1706.7613:

• No separate state filing for a series. Only the LLC files articles. The Secretary of State's record shows the LLC, not its series.
• No separate statutory agent for a series. The agent requirement in ORC 1706.09 applies to the LLC, and the LLC has one agent.
• No state status for a series. A certificate of good standing speaks to the LLC on the state record; nothing in the series sections provides one for an individual series.
• No statement that a series is a separate legal entity. Chapter 1706 says the LLC is a separate legal entity; the series sections describe separation of assets and liabilities, not separate legal personhood.

Some questions the Ohio statute leaves open, or leaves to other law. Whether another state will respect the separation between series, how a bankruptcy court treats a series, and how a lender, title insurer, or landlord will deal with a series are not answered by Chapter 1706. Federal tax treatment of each series is a question for your accountant. If any of these could decide your plan, get an attorney's opinion before relying on the structure.

How decisions and money work inside a series

Chapter 1706 has parallel default rules for a series, applying to the members associated with it rather than to all members of the LLC.

Being in one series does not tie a member to the others. Dissociating from a series does not, by itself, dissociate the member from any other series or from the LLC, and it does not require any other series to wind up (ORC 1706.766(C), (D)). The events that dissociate a member from a series, including death, expulsion, and bankruptcy, are listed in ORC 1706.765.

Nothing in these sections requires different people in different series. One owner can be the only member associated with every series, for example one owner with a separate series for each rental property. The tax and liability basics for a one-owner company are in our guide to the Ohio single-member LLC.

Dissolving one series without dissolving the LLC

A series can be dissolved and wound up without dissolving the LLC, and winding up does not affect the series' liability limitation (ORC 1706.767). Under ORC 1706.768, a series dissolves on the first of these:

• The LLC itself dissolves.
• An event the operating agreement names occurs.
• All members associated with the series consent.
• Ninety days pass after the last member associated with the series dissociates.
• A court orders it because carrying on the series under the operating agreement is not reasonably practicable.

After dissolution, the series exists only to wind up: collect assets, sell property, pay or provide for debts, and distribute what remains (ORC 1706.769). Known claims can be handled by written notice giving a deadline at least 120 days out (ORC 1706.7611). The series may also publish notice on the LLC's website and send it to the Secretary of State for posting, which starts a two-year window for other claims (ORC 1706.7612). Creditors are paid first; then members get back unreturned contributions, and any surplus follows their distribution shares (ORC 1706.7613).

Filing and statutory agent implications of an Ohio series LLC

Forming a new series LLC

The LLC files ordinary Articles of Organization, Form 610, with the $99 state fee. Form 610 has no series checkbox. Its instructions direct you to attach the ORC 1706.761(B)(3) statement as an additional provision if it applies. Have your attorney word the statement so it matches the operating agreement's own statement under 1706.761(B)(2).

Adding series to an existing LLC

If your articles never mentioned series, the third condition is not met until they do. That means amending the articles to add the statement, with a $50 state fee, plus updating the operating agreement. Our amendment to articles service files the amendment. Whether liabilities incurred before the amendment get the benefit is a question for your attorney.

One statutory agent for the whole LLC

Because the LLC has a single agent on the Ohio record, a lawsuit over one series' building or contract will typically be served on the LLC's statutory agent. The papers may name the LLC, the series, or both. That makes it important that whoever receives them knows which series is involved and who decides for that series.

With our Ohio statutory agent service, documents are scanned to your portal the same business day, service of process notifies every authorized contact, and portal access can be limited by entity and document category. The plan is $49 per business per year.

Setting up and running an Ohio series LLC: a checklist

The statute gives the protection; day-to-day habits keep it. Every item below ties back to one of the three conditions in ORC 1706.761(B) or to proving them later.

• Articles: include the statement that the LLC may have one or more series of assets subject to the limitations in 1706.761(A). Without it, no series is protected.
• Operating agreement: include the same limitation statement, define how a series is created, and list the members associated with each one.
• A schedule for each series: its name or designation, its purpose, its members, and the assets assigned to it. Update it whenever an asset moves.
• Separate books: a ledger for each series, and in practice a separate bank account, so no series pays another's bills.
• Title and contracts: deeds, vehicle titles, leases, and vendor contracts that show which series owns or owes, rather than just the LLC's name.
• Insurance: policies that name the right series, so a claim against one is not paid from another's coverage or excluded altogether.
• Transfers between series: document them as you would a transaction with an outsider, with a written record and a fair price.

Of the three conditions, the records one is the easiest to lose, because it depends on everyday bookkeeping rather than a document you sign once. If an owner moves money freely between series and the records cannot show which series holds what, the records condition in 1706.761(B)(1) is in doubt. Have your accountant set up the books before the first series acquires anything.

When does an Ohio series LLC make sense?

The usual candidates are owners with several similar assets they want to wall off from each other: rental properties, equipment fleets, separate investment pools, or product lines with different risk. The alternative is a separate LLC for each one.

Ohio's low upkeep cuts into the series LLC's main selling point. Ohio LLCs file no annual report, so the recurring cost of separate LLCs is mostly agent service and accounting, not state fees. Against that, separate LLCs are something every bank and title company already understands. For owners of rental properties, compare the two approaches in our guide to a registered agent for a rental property LLC, and choose with your attorney and accountant.