Washington LLC Series: Orchard Segmentation
May 8, 2024
Washington Series LLC: Protecting Each Orchard Block
For apple growers in Washington, managing risk is just as important as growing a great crop. One innovative way to protect your business is by using a Series LLC structure. This approach allows you to “ring-fence” liability for each orchard block, so that a problem in one area—such as a food safety incident—does not automatically threaten your entire operation.
How Does a Series LLC Work?
A Series LLC is a special type of limited liability company permitted in some states, including Washington. It allows you to create separate “series” or “cells” within a single LLC. Each series can own assets, enter contracts, and face liabilities independently from the others. For apple growers, this means you can place each orchard block into its own series, isolating risks and liabilities.
Maintain separate spray logs, harvest records, and GAP (Good Agricultural Practices) audits for each series. This helps demonstrate that each block operates independently, which is important for legal protection.
Keep financial records and bank accounts distinct for each series, if possible. Commingling assets or records can undermine the liability shield.
Clearly label contracts, invoices, and other documents with the correct series name to avoid confusion and strengthen the separation.
Caveats and Considerations
While a Series LLC can offer strong protection, it is not a guarantee. Courts may “pierce the veil” if you do not maintain clear separation between series, or if you use the structure to commit fraud. Additionally, not all states recognize Series LLCs, and there may be uncertainty if you do business or face lawsuits outside Washington. Insurance coverage should also be reviewed to ensure it aligns with your Series LLC structure.
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Disclaimer: This blog post provides general information for educational purposes only. It is not legal advice. The outcome of any legal matter can vary based on your personal circumstances and the evidence available. Always review your specific situation carefully.