Series or not?

[danrushing]

Diane,
It's been a while since I last posted. Sorry By the way My business partner and I recently purchased the LLC Operating Guide and Winning the Independent Argument for 2011 download and I love it! I also have your book, too. Thanks for your awesome resouces! (Of course, I'm still waiting for a spreadsheet style format showing all the business/personal tax advantages and disadvantages for each state. I can't wait to see it when it's done! )
Ok. Here's my dilemma: We want to set up a business where we can setup a new cell/structure for each city we expand to in order to create new ownership percentages. So in on city it would be two of us with a specfic membership split. In another city there may be three of us. We would want the revenue coming from that city business to be allocated to that cell/structure with it's own membership percentages. Here's an example: The main LLC structure would be be 72/28 split. Another city business may be 50/50. Another city business would be 40/40/20. There would be multiple cities within a state. So we would not want to just set up the cell/structure as one per state. There may be 10 per state. Also we will primarily be contracting with Independent Contractors do the work. Would I have to create new LLC structures for each city business or could I do it with a series LLC?

One more thing... The business we're starting is in NY with all of our contractors there too. All the work will be done in NY until we launch to another city or state. I live in California so we may have a nexus issue to.
Thanks!

[Diane Kennedy]

Hi Dan,

Nice to hear what's going on!

I think the Series LLC would be perfect. Each cell could be an individual city, with separate splits on income. You will need to have separate business accounts and different tax returns for each (because of the different ownership splits). The Series makes it much more affordable to set up the structures.

Dan, I think you likely will have both NY and CA nexus. Wow, could you pick any more expensive states to pay taxes in?

[danrushing]

In my 2011 Operating Guide for LLC's I didn't see any documents/forms for setting up Series LLC's. Is there anything different I need to add to the operating guide that I already have from your package? If not, how can I get that?

In regards to nexus, how will that actually look on my tax return since it's a LLC partnership (in order for it to be a series LLC not an S-corp election)?

Thanks!