Nebraska LLC Formation: Series LLC for Grain Bins
Nov 11, 2024
Nebraska Series LLC: Shielding Each Grain Bin from Liability
One fire shouldn’t bankrupt your whole operation. Nebraska’s series LLC statute allows farm owners to silo risk by creating separate “series” within a single LLC, so that a problem in one area—like a fire in a single grain bin—doesn’t threaten the assets of the entire business.
Register a master LLC: Start by forming a master LLC with the Nebraska Secretary of State. You can then create protected series under this master LLC by filing an amendment or including the series in your initial certificate of organization.
File protected series via amendment: Each series can own specific assets (such as individual grain bins, equipment, or parcels of land) and have its own members, managers, and business purpose. This structure helps isolate liabilities, so a lawsuit or loss affecting one series does not automatically impact the others.
Maintain separate insurance schedules: For the liability shield to be effective, it’s important to keep clear records and separate insurance policies for each series. Commingling assets or failing to document transactions between series can weaken the liability protection.
Caveat: While Nebraska law recognizes series LLCs, not all states do. If your business operates across state lines, or if you have lenders or partners in other states, the liability shield may not be honored everywhere. Additionally, the IRS and Nebraska Department of Revenue may treat each series as a separate entity for tax purposes, so be prepared for additional filings and compliance requirements.
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Disclaimer: This blog post provides general information for educational purposes only. It is not legal advice. The outcome of using a series LLC can vary based on your personal circumstances, the evidence available, and changes in state or federal law. Always review your options carefully and consider your unique business needs before making decisions.