Florida’s New Protected Series LLC – Proceed with Caution

Effective July 1, 2026, Florida will permit the use of a “protected series LLC” (PSLLC) as outlined in Chapter 605 of the Florida Statutes. With this structure, a single parent LLC can create multiple internal series, each possessing its own assets, liabilities, members, and managers. The main advantage is clear: business owners with various properties, locations, or ventures can manage everything under one entity, while aiming to protect each series from the risks associated with others.

However, business owners should be cautious with this structure. The liability shield is not self-executing; it requires strict separation, especially in keeping records that clearly show which assets and debts belong to each series. If recordkeeping is lax, funds are transferred too casually between series, or operating agreements are poorly written, there could be expensive legal disputes over whether each series is truly separate.

In Florida, this is a brand new area of law, with virtually no developed case law or administrative guidance. As a result, there is uncertainty as to whether third parties, including lenders, benefits providers, insurers, business partners, and courts outside of Florida, will recognize and honor the liability separation among different series. Tax classification rules also add another layer of complexity because the IRS and other taxing agencies may treat each series as its own tax entity. Additionally, Florida’s new law requires formal state filings for protected series, imposing detailed rules on naming, governance, and asset association.

Ultimately, while a PSLLC can work for some, the implementation requires thorough planning alongside knowledgeable advisors to make sure the benefits are realized. Proceed with caution, as improper management or lack of clear separation between series could result in legal pitfalls and loss of intended protections.

Mallory focuses on general corporate law and mergers and acquisitions (M&A), and she is passionate about advising business owners. She can be contacted at [email protected] or 941-329-6617.