At Smith Rayl Law Office, LLC, we know that many small business owners are looking for affordable resources, information, and strategies to help expand their businesses and reach new customers.

This week, the Martindale Brightwood Community Development Corporation, in partnership with the U.S. Small Business Administration and the Community Resurrection Partnership, is hosting a FREE Business Opportunity Fair.

This event is a great chance to learn about opportunities to grow your small business and how to market your products and services to customers.

ReportsIndiana nonprofit corporations are being converted to a new schedule for filing business entity reports with the Indiana Secretary of State.  In the past, a business entity report has been due every year in the same month in which the organization was incorporated. Nonprofit corporations will now file business entity reports every other year, the same schedule that applies to business corporations and LLCs. The filing fee will double from $10 to $20 for reports filed on paper.  Online filings will cost $22.

The transition began on July 1, 2016, when existing organizations began filing biannual reports and paying the $20 filing fee. Organizations that file a business entity report in July through December 2016 will file their next business entity reports in 2018 and then will continue to file reports in every even numbered year (still in the same month in which they were incorporated). Organizations that file their first biannual report in January through June of 2017 will file their next reports in 2019 and then in every odd numbered year.

New organizations incorporated in an even numbered year will file business entity reports in the same month of every even numbered year thereafter. New organizations incorporated in an odd numbered years will file business entity reports in the same month of every odd numbered year.

If you are not already familiar with series LLCs or with the new Indiana series LLC statute that takes effect on January 1, 2017, you may want to read the articles at Part I, Part II, Part III, Part IV, and Part V.

In the first of these articles, I compared a series LLC to a parent LLC with subsidiary LLCs, and I stated that one difference between the two concepts is that a master LLC does not own its series in the same sense that a parent company owns its subsidiaries. Instead, the interest that makes up each series is held by persons who may or may not also hold interest in the master LLC or in other series. Although I believe that is commonly the way series LLCs are set up, I think it may be possible to set up a series LLC so that the master LLC does, in fact, hold part or all of the interest in its series. Let’s look at four possible structures, using the example of a real estate developer than develops and owns three apartment buildings.

Structure #1

[The previous articles on this topic are here:  Part I, Part II, Part III, Part IV.]

Now that we’ve discussed the formal public filings necessary to set up a master LLC and series, we’ll turn out attention to the content of operating agreements.

As mentioned in the last post, every master LLC must have an operating agreement, and prudence dictates that it be in writing, even though the statute does not, at least not expressly.  As a starting point, the operating agreement for a master LLC should have all the same elements as an operating agreement for a traditional LLC.

The first article on series LLCs contained some basic concepts and terminology.  The second and third ones addressed the fundamental questions of whether a series is a separate entity (answer:  yes, but it lacks some of the attributes of a separate entity) and of what defines or constitutes a series (answer, at least as contemplated by the Indiana statute:  a portion of the interest in the master LLC designated as the series). We’ll return later to some other metaphysical questions, but this article discusses the more mundane issue, how does one set up a series LLC in Indiana?

Organizing the Master LLC

As with a traditional LLC, a master limited liability company is formed by filing articles of organization[1] with the Indiana Secretary of State. Ind. Code § 23‑18.1‑3‑1 and § 23‑18.1‑6‑1.  An existing LLC can be converted to a master LLC with appropriate amendments to its articles of organization, but the amendment requires unanimous consent of the members, regardless of any provision of the operating agreement permitting the articles of organization to be amended with less than unanimous consent. Ind. Code § 23‑18.1‑3‑2.  It appears that it is permitted, but not necessary, for the articles of organization to include the names of the series that may be designated.  See Ind. Code § 23‑18.1‑6‑7, discussed below.

[Please read Part I and Part II before reading this article.]

The second of this group of articles on series limited liability companies addressed the question of whether a series is an entity under Indiana law and concluded that the best answer is probably, yes, even though it lacks some of the attributes that one would ordinarily expect of an entity.  But exactly what is it that makes up a series?

The definition of “series”

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[This is the second of several articles on series LLCs, especially Indiana series LLCs.  Go here for Part I, which includes an introduction to the concept of series LLCs and some terminology.]

Is a series an entity?

That’s the question almost every lawyer asks when first introduced to series LLCs.  It is really shorthand for a lot of other questions:  Can a series enter into its own contracts?  Can it sue and be sued in its own name?  Can assets be titled in the name of the series, as opposed to the name of the master LLC? And so on.