On April 6, the Delaware Corporation Law Section of the Delaware Bar Association proposed some major and minor amendments to the Delaware Limited Liability Company Act. If introduced in and approved by the Delaware General Assembly and the governor, one of the most significant changes will involve the provisions of the act dealing with series limited liability companies (series LLCs). The proposed amendments are intended to clarify the characteristics of series LLCs and further facilitate their use.

Series LLCs are most frequently used as vehicles for investment funds and for holding title to assets in certain types of equipment financing transactions. In these types of transactions, assets are distributed from the “master” LLC into separate series of the LLC. Each series can have its own pool of assets titled in the name of the series LLC and each may have its own investment, return or management criteria. Set up in this way, the series LLC can greatly reduce the administrative costs and burdens that would otherwise be present in these types of financings or investment vehicles.

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