What Is a Series LLC in Oklahoma, And When Is It Best For Me?

If you’re starting or expanding a business, you may have heard about something called a “Series LLC in Oklahoma.” This unique business structure offers entrepreneurs and investors a flexible and cost-effective way to manage multiple businesses, assets, or investments under a single legal entity. But what exactly is a Series LLC in Oklahoma, and how does it work? Here’s what you need to know.

Understanding the Basics

A Series Limited Liability Company, or Series LLC, is a special type of LLC that allows one parent LLC (often called the “Master LLC” or “Umbrella LLC”) to create multiple “series” or “cells” beneath it. Each series operates like a separate entity with its own assets, liabilities, and business operations. In Oklahoma, Series LLCs are governed by the Oklahoma Limited Liability Company Act, found in Title 18 O.S. § 2054.4.

Importantly, each series can have different members, managers, and business purposes. Most critically, Oklahoma law allows each series to have limited liability protection from the debts and obligations of the other series, provided the proper formalities are followed.

Key Features of a Series LLC in Oklahoma

1. Separate Liability Protection
   Each series can protect its own assets from the liabilities of the others. For example, if one series is sued, the other series are not automatically liable for that lawsuit.
2. One Filing, Multiple Businesses
   You only need to file one Certificate of Formation with the Oklahoma Secretary of State to create a Series LLC. However, you must specifically state that your LLC is authorized to establish series.
3. Internal Recordkeeping Is Critical
   Oklahoma law requires that records for each series must be maintained separately. Each series should track its income, expenses, assets, and liabilities. By doing this, you are protecting your limited liability status from those seeking to pierce the corporate veil
4. Flexibility in Ownership and Management
   Different series can have different owners (members) and managers, depending on what is specified in the operating agreement.
5. Cost-Efficient
   Instead of setting up and maintaining multiple LLCs — each requiring its own filing fees, annual reports, and franchise taxes — a Series LLC allows you to manage multiple ventures more affordably.

How to Set Up a Series LLC in Oklahoma

To form a Series LLC in Oklahoma, you must:

• File a Certificate of Formation with the Oklahoma Secretary of State that explicitly authorizes the creation of series.
• Draft a strong Operating Agreement that clearly outlines how each series is created, governed, and separated.
• Maintain separate records for each series.
• Properly name each series when entering into contracts or legal agreements (e.g., “ABC LLC, an Oklahoma Series LLC, on behalf of XYZ Series”).

While the initial filing process is straightforward, maintaining a Series LLC requires diligent bookkeeping and attention to legal detail to preserve the liability protections between series.

When Should You Consider a Series LLC?

A Series LLC may be a smart choice if you:

• Own multiple rental properties and want to keep them legally separate without forming multiple LLCs.
• Operate several different business ventures.
• Need a flexible structure that can grow over time without a lot of added filing costs.

However, it’s important to consider your specific situation carefully. While Series LLCs are recognized and protected under Oklahoma law, other states may not recognize the separate liability shields if you operate or are sued outside Oklahoma. Additionally, some lenders and investors may prefer dealing with traditional single-entity LLCs.

Oklahoma Business Lawyers in Your Corner

A Series LLC offers business owners in Oklahoma an efficient and powerful tool to organize and protect their assets. But like any business structure, it’s not one-size-fits-all. Setting up and managing a Series LLC correctly requires careful planning, a solid operating agreement, and strict recordkeeping. If you are considering forming a Series LLC or need advice on structuring your businesses for growth and protection, we can help. For a free consultation with a Tulsa business law attorney at Kania Law Office, please call us at 918-743-2233. You can also follow this link to ask a Free business law question online.