Florida’s New 2026 Protected Series LLC Law: Formation, Liability Protection & Key Benefits

Florida stands as a premier destination for businesses, providing limited liability companies with exceptional flexibility, no state income tax on pass-through income, and robust legal safeguards for members and managers. These advantages make it easier for owners to focus on growth rather than regulatory hurdles.

On June 20, 2025, Governor Ron DeSantis signed Senate Bill 316 into law, introducing the Uniform Protected Series Provisions to the Florida Revised Limited Liability Company Act (Chapter 605, Florida Statutes). Effective July 1, 2026, this update allows Florida to join a growing number of states that authorize a single parent limited liability company ("parent LLC") to create multiple protected series. Each series can maintain its own assets, liabilities, members, managers, and business objectives, all while benefiting from built-in barriers that protect against cross-liability with the parent or other series.

For real estate investors holding multiple properties, entrepreneurs juggling diverse ventures, or any owner managing varied assets, this structure offers a smarter, more economical path than establishing separate LLCs for each endeavor. It cuts down on redundant paperwork, annual filings, registered agent costs, and (where appropriate) separate tax identification numbers, while also providing for robust asset protection through clear separation.

Whether you’re forming a new Florida LLC or evaluating whether to convert your existing Florida LLC, understanding the statutory rules are important to maximize the strategic advantages available for this new entity structure.

This post provides a brief overview of Florida protected series LLCs, covering their basics, core legal elements, essential safeguards, and some practical best practices. 

What Is a Protected Series LLC in Florida? A Brief Overview

A Florida protected series LLC represents an innovative hybrid of traditional limited liability companies and corporate divisions. This structure enables a single master or parent LLC to establish multiple internal series. Each series operates as a semi-autonomous unit, capable of holding distinct assets, incurring separate liabilities, and pursuing unique business purposes all under the umbrella of one parent entity.

The primary advantage of a series LLC lies in the segregation of liabilities. In this regard, creditors of one series cannot reach the assets of the parent LLC or other series, a concept known as “horizontal” liability shielding. This complements the standard “vertical” protection that shields individual members and managers from the debts and obligations of an LLC. However, series LLCs have historically been available in only a handful of states, such as Delaware and Texas, prompting businesses to form them elsewhere and qualify as foreign entities in Florida. This new law positions Florida as an attractive jurisdiction by permitting domestic formation, potentially reducing administrative burdens, and enhancing enforceability of liability protections.

Codified in new sections 605.2101 through 605.2802 in Chapter 605 of the Florida Revised Limited Liability Company Act, the framework requires strict segregation and detailed record keeping for preserving the integrity of the liability barriers offered to a Florida protected series LLC.

Formation of a Protected Series LLC in Florida

The formation of a protected series LLC in Florida is designed to be straightforward, but the statutory liability shields depend entirely on strict adherence to the rules.

A protected series may only be established by an existing Florida LLC that serves as the “parent” LLC. This parent may be newly formed or pre-existing. Foreign (i.e., out-of-state) LLCs cannot directly create Florida protected series. Rather, they must first form or domesticate a Florida parent entity if they wish to utilize the structure in Florida.

To create a protected series LLC, a “Protected Series Designation” form must be filed with the Florida Department of State, Division of Corporations. This filing must include the full name of the parent LLC, the exact name of the protected series (which must begin with the parent’s full name and end with “Protected Series,” “P.S.,” or “PS”), a statement confirming it is a protected series of the named parent, and the name and Florida street address of the series’ registered agent, which may be the same as or different from the parent’s agent. However, before this can be done, the parent LLC operating agreement must expressly authorize the establishment of one or more protected series. If the current operating agreement is silent or prohibits series, it must be amended by the vote or written consent of its members unless the operating agreement provides for a different vote or consent threshold (e.g., supermajority, majority, or manager approval).

Although no additional public filings are required, the parent LLC must immediately create and continuously maintain separate, contemporaneous internal records for each series and the parent LLC. These records must clearly identify the assets associated with each series and the parent LLC, the liabilities and obligations of each series and the parent LLC, the members (if any) of each series and the parent LLC, the managers (if any) of each series, and the managers of the parent LLC. Failure to maintain these records risks losing the internal liability shield and exposing all assets.

Liability Protections for Florida Protected Series LLC

A key benefit of Florida’s new protected series LLC law is its dual-layer liability protection, what is known as “vertical” and “horizontal” shielding.

Vertical shielding is the core of standard LLC protection as it shields the members and managers from being personally liable for the debts and obligations of the LLC. This protection remains unchanged and applies equally to a parent LLC and every protected series.

Horizontal (or internal) shielding is the new feature that makes series LLCs unique. Each protected series is treated as if it were a separate LLC company solely for purposes of determining ownership of assets, enforcing liabilities and obligations, and keeping each series separate in bankruptcy proceedings. Simply stated, a creditor of one series may only pursue the assets associated with that series and has no statutory claim against the assets of the parent LLC, the assets of any other series, or the personal assets of the members.

This internal shield also extends to tort claims. For example, if a tenant is injured at a rental property owned by one series, the plaintiff’s recovery is limited to the assets recorded as belonging to that series, which typically consists of  the property itself, its rental income, and insurance proceeds, regardless of how valuable the parent LLC or other series are.

Segregation and Record Keeping Are Critical to Preserve Liability Shields

It’s important to note that liability shields are conditional and not automatic. They exist only with strict, ongoing compliance. This requires the parent LLC to maintain records that clearly and contemporaneously identify for each series and itself every asset “associated” with a specific series and the parent LLC (including date acquired, purchase price, source of funds, and any encumbrances), all liabilities and obligations incurred by or on behalf of that series and parent LLC, and the members and managers (if any) associated exclusively with that series.

For example, assets that belong to the parent LLC (e.g., a corporate office building used for headquarters or a general operating account) must be expressly documented as “parent-level” and not associated with any series. If an asset is not properly allocated in the records to a specific series or to the parent LLC, it will likely trigger the loss of the internal liability shield for the entire structure and expose all assets.

Best Practices to Maintain Protected Series LLC Protections

Some best practices to preserve the internal shield against liability include dedicated accounts, separate booking keeping, sufficient documentation, regular audits, and clearly documented money flows. Each of these are briefly discussed below.

Dedicate Accounts for the Parent LLC and Each Series

Nothing signals genuine separation more clearly than separate bank and investment accounts titled exactly in the name of the parent LLC and each individual protected series. In practice, they can serve as powerful evidence that assets have not been commingled. Indeed, a single shared operating account can be one way to show that the series structure is not authentic and internal liability shields should be disregarded. To mitigate this risk, distinct bank and investment accounts should be opened and titled precisely for the parent LLC and each series.

For example, the bank account for the parent LLC should be titled in the name of the parent LLC only (e.g., Florida LLC). The bank account on a series level should be titled in the specific name of the specific series (e.g., Florida LLC, Palm Beach Protected Series). 

Use Separate Ledgers for the Parent LLC and Each Series

Clear, series-specific bookkeeping is the everyday evidence that each protected series and the parent LLC is being run as a genuinely independent operation. Even with perfect bank accounts and contracts, a single combined profit-and-loss statement or vague journal entries can destroy the credibility of the entire structure.

For example, if using QuickBooks, set the parent LLC as the main company file, then add the parent itself and each protected series as a separate class. Ensure to enable class tracking and tag every transaction for revenue, expenses, bank deposits, loan payments, and transfers. This procedure produces a clean, individual profit-and-loss and balance-sheet report for the parent and each series.

Record Contributions, Distributions, and Transfers Meticulously

A common way the internal liability shield could collapse is when money or property moves between the parent LLC and a series, or between two series, without a clear, contemporaneous paper trail. Courts and creditors will scrutinize these movements closely, and vague or missing records are often treated as evidence of commingling. Therefore, every dollar or asset moving in or out should be treated and recorded as if it were dealing with an unrelated company.  

Regularly Audit with Signed Asset Schedules

An authoritative single document for segregation and preserving the internal liability shield is maintaining a concise, manager-signed asset schedule that clearly states which assets and liability is owned by the parent and each series. One way to accomplish this is creating an asset and liability allocation schedule at least annually. The schedule should list each significant asset and debt with its description, value, acquisition date, and exact allocation, and be signed by the applicable managers.

Treat Inter-Series and Parent-to-Series Loans Like Arm’s-Length Transactions

Money moving between the parent LLC and a series, or between two series, without proper documentation is one way to lose the internal liability shield. Courts typically view undocumented or below-market “loans” as evidence of commingling, even if the intent was innocent. If funds need to be moved across the parent or any of the series, such as loans, ensure to treat the transfer or loan as you would with any unrelated company or other third party.

For example, an inter-company loan should be memorialized in a promissory note that identifies the parties (i.e., the parent LLC or each series involved), the principal amount of the loan, interest rate, repayment terms, and the maturity date, and be signed.

Closing Remarks

Florida’s Protected Series LLC delivers strong compartmentalized safeguards. A single formation, annual report, registered agent, and (in many instances) a single EIN can isolate dozens of assets or ventures from shared risks. However, its advantage is fragile by design in that the protective internal shields will only benefit those who strictly treat the parent LLC and each protected series as if it truly were a standalone company. In this regard, it is imperative that the parent LLC can demonstrate through clear, contemporaneous, and scrupulously maintained records that it and each series has been operated as though it were a genuinely separate company. Otherwise, even one single commingled bank account or an incomplete asset schedule may result in the separation collapsing and, as a result, expose all assets.

For those committed to rigorous compliance, a Florida Protected Series LLC offers a strategic, cost-efficient approach to isolating and mitigating business risks.

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This post provides general information only and is not, and should not be, construed as legal advice or opinion for any individual matter or circumstance. Laws and regulations can change, and specific situations may require different approaches. Always consult a qualified attorney for advice tailored to your specific circumstances.