A Series LLC in Tennessee is a single limited liability company that can hold multiple internal divisions, called series, each with its own assets, debts, and operations, and each walled off from the others for liability purposes. Tennessee authorizes the structure under Part 11 of its Revised Limited Liability Company Act, placing it among roughly twenty states that recognize the format. Real estate investors with several rental properties are the most common users, because the structure lets one filing and one annual report cover a portfolio that would otherwise require a separate LLC for every property.
How the Structure Works
One parent LLC sits on top, often called the master or umbrella LLC. Underneath it, you create individual series, sometimes called protected series or cells. Each series can own property, enter contracts, open bank accounts, and sue or be sued in its own right. The parent files one set of formation documents with the state; the series themselves are created inside the operating agreement, not through separate filings.
The point of the structure is the liability wall between series. A lawsuit against Series A over a slip-and-fall at a property it owns can reach only Series A’s assets. Series B, Series C, and the master LLC itself stay out of reach. That protection depends entirely on keeping the series genuinely separate in practice. Mix the money or records between two series and a court can treat them as one.
Forming a Series LLC in Tennessee
Formation begins with filing Articles of Organization with the Tennessee Secretary of State. You can file online, by mail, or in person at the Business Services Division in Nashville.1Tennessee Secretary of State. Instructions Articles of Organization Limited Liability Company The articles must cover:
- A name including “limited liability company,” “LLC,” or “L.L.C.” The master LLC’s name should also signal its series nature, and each individual series typically carries the master’s name followed by a designation such as “Series A.”2Justia Law. Tennessee Code 48-249-106 – Name Requirements
- A registered agent with a physical Tennessee street address. P.O. boxes are not accepted.1Tennessee Secretary of State. Instructions Articles of Organization Limited Liability Company
- The principal office address.
- A statement that the LLC is organized as a Series LLC. This is what activates the internal liability protections under Tennessee law.
The filing fee is $300 for a Series LLC with six or fewer members.3Tennessee Secretary of State. Business Forms and Fees Add $50 for each additional member beyond six, capped at $3,000. Online filings may add a convenience fee.
Tennessee does not require you to file your operating agreement with the state, but this is where the real structure lives. The agreement should spell out how each series is established, what assets belong to it, who manages it, how profits and losses are allocated, how new series are added, how existing series are dissolved, and what happens if a member leaves. A thin or missing operating agreement puts the liability walls on shaky ground before you ever face a dispute.
Keeping Each Series Separate
The internal shield works only if each series is run as a genuinely independent operation. This is where owners most often slip, and the fastest way to lose the protection the structure was built to provide.
- Every series needs its own bank account. Never pay Series A’s expenses out of Series B’s account, even temporarily.
- Each series should keep its own books, its own ledger, and its own financial statements. If a judge or auditor cannot tell where one series ends and the next begins, the wall is effectively gone.
- Contracts, leases, deeds, and insurance policies should identify the specific series, not just the master LLC.
- Transfers between series should be documented like transactions between unrelated companies. For real estate, that means a deed transfer, updated title insurance, and lender approval if a mortgage is in place.
Sloppiness in any of these invites a court to pierce the veil between series, which collapses the walls and exposes every series’s assets to every series’s creditors.
Annual Reports
Tennessee LLCs must file an annual report with the Secretary of State. The fee mirrors the formation structure: $300 for six or fewer members, plus $50 per additional member, capped at $3,000.4Tennessee Secretary of State. Frequently Asked Questions for Businesses The report is due by the first day of the fourth month after your fiscal year ends, which is April 1 for calendar-year filers. Missing the deadline puts the LLC at risk of administrative dissolution.
Tennessee Franchise and Excise Tax
Two state taxes apply. The franchise tax is $0.25 per $100 of net worth,5Justia Law. Tennessee Code 67-4-2106 – Rate of Tax with a commonly cited $100 minimum. For tax years ending on or after January 1, 2024, Tennessee repealed the old property measure that sometimes inflated the base, so the tax is now calculated on net worth alone.6Tennessee Department of Revenue. Property Measure Repeal The excise tax is 6.5% of Tennessee taxable income.7Tennessee Department of Revenue. Due Dates and Tax Rates
The important rule for Series LLC owners is that Tennessee treats the master LLC and each series as a separate entity for franchise and excise purposes. Each non-disregarded series must file its own return. The one exception: a series wholly owned by a corporation and disregarded for federal tax purposes is also disregarded for Tennessee franchise and excise purposes.8Cornell Law Institute. Tennessee Regulation 1320-06-01-.41 Both taxes are due by the 15th day of the fourth month after fiscal year-end, April 15 for calendar-year filers.
This separate-filing rule eats into the administrative savings. With five active series, you file six franchise and excise returns each year: one for the master and one for each series.
Federal Tax Treatment
Federal treatment of Series LLCs is unsettled. The IRS proposed regulations in 2010 that would have treated each series as a separate entity for classification, but never finalized them.9Federal Register. Series LLCs and Cell Companies In practice, the IRS has indicated each series is treated separately and can elect its own classification, so one series might be a disregarded entity, another a partnership, and another an S-corporation.10Internal Revenue Service. Another Look at Limited Liability Companies in Light of the TCJA
Whether each series needs its own Employer Identification Number depends on how independently it operates. A series with its own members, business purpose, and financial records generally needs a separate EIN. A series sharing ownership and management with the master may not. Given the ambiguity, most tax professionals recommend getting a separate EIN for each active series to keep the records clean.
Where the Structure Is Weak
The Series LLC carries risks a standard LLC does not.
Other States May Not Honor the Walls
Only about twenty states authorize Series LLCs. If one of your series does business in a state without series legislation, that state’s courts may not respect the internal liability walls. A Tennessee Series LLC that owns rental property out of state could find its internal protections meaningless in that state’s courtroom. Before expanding across state lines, check whether the target state has its own Series LLC statute or case law recognizing foreign series structures.
Bankruptcy Is Unresolved
Federal bankruptcy law defines a “debtor” as a “person,” which includes individuals, partnerships, and corporations. LLCs are not explicitly listed, though courts have generally treated them as close enough to corporations to qualify. Whether an individual series within a Series LLC qualifies as a separate debtor eligible for its own filing is genuinely unresolved, and no binding precedent confirms that a court would respect internal walls during insolvency. If bankruptcy is a realistic risk for any venture, a standalone LLC provides a clearer path.
Banks May Push Back
Many banks are unfamiliar with Series LLCs and may not have processes for opening accounts in the name of an individual series. Expect to shop around or walk a compliance department through the structure. Some owners end up spreading accounts across different institutions, which adds friction. It is a practical annoyance rather than a legal risk, but it catches people off guard.
Thin Case Law in Tennessee
Tennessee’s Series LLC provisions have not produced the volume of court decisions traditional LLC law has. When a novel question comes up about whether a particular series’s wall holds, there may be no Tennessee case on point. Courts could look to Delaware’s more developed series case law, but that is not guaranteed.
When It Fits and When It Does Not
The structure fits best when you hold multiple assets or ventures under common ownership and management but need liability separation between them. Rental real estate is the textbook example: each property goes into its own series, so a tenant lawsuit over one property cannot reach the others. Small holding companies with multiple product lines or investment portfolios can also benefit from the streamlined formation and filing.
A Series LLC fits poorly when ventures have different owners, when you plan to operate in states that do not recognize the structure, or when any single venture carries enough litigation risk that an untested liability wall becomes a real worry. In those cases, the extra cost of separate LLCs buys certainty that a Series LLC in Tennessee cannot yet match.