Florida's New Protected Series LLC: What Business Owners Need to Know

On June 20, 2025, Governor Ron DeSantis signed Senate Bill 316 into law, adding a brand-new entity structure to Florida's business toolkit: the protected series LLC. Codified as sections 605.2101 through 605.2802, Florida Statutes, the law took effect July 1, 2026, giving the Florida Department of State time to build out the filing systems needed to support it. For business owners, developers, real estate investors, and fund managers, this is an important development worth understanding.

What Is a Protected Series LLC?

A protected series LLC is a single-parent LLC that can create one or more internal divisions, called "protected series," beneath it. Each protected series can hold its own assets, assume its own liabilities, have its own members and managers, and pursue its own business purpose, all while operating under the umbrella of a single parent company.

Think of it as a filing cabinet with separate, locked drawers. The cabinet itself is the parent LLC. Each drawer is a protected series. Items placed in one drawer are legally walled off from the others, even though every drawer belongs to the same cabinet.

A series is created by filing a "protected series designation" with the Florida Department of State. Each series must include the parent LLC's name, along with the words "protected series" or the abbreviations "PS" or "P.S.," so that anyone dealing with the entity can identify its structure.

The Benefits

Cost and administrative efficiency. Instead of forming and maintaining a separate LLC for each property, venture, or investment, an owner can create multiple series under a single parent entity. This means fewer formation filings, fewer registered agent fees, and less duplicative paperwork compared to running several standalone LLCs.

Liability segregation. The core appeal of the structure is that the debts and obligations of one series generally cannot reach the assets of another series or the parent LLC. A real estate investor holding five rental properties in five separate series, for example, can generally prevent a lawsuit arising from one property from putting the other four at risk.

Flexibility. Each series can have different owners, managers, and business objectives. This makes the structure attractive to real estate investors, franchise owners running multiple locations, and private equity or fund sponsors who want to isolate individual investments or projects without standing up a new legal entity every time.

Recognition of out-of-state series. Florida's law also recognizes protected series LLCs formed in other states, which helps businesses that are already using the structure elsewhere and want to expand into Florida.

How Segregated Liability Is Actually Maintained

This is the part prospective clients most need to understand: the liability shield is not automatic. Florida's statute builds in two distinct protections. The first is the traditional "vertical" shield that already exists for any LLC, which protects the owners personally from the company's debts. The second, and new, protection is the "horizontal" shield, which protects each series from the debts of the other series and of the parent LLC itself.

That horizontal shield only holds up if the series LLC follows strict recordkeeping rules. Florida law requires that the assets and liabilities tied to each series be clearly and separately documented, well enough that a reasonable person reviewing the records could identify which asset belongs to which series and understand how it was acquired. In practice, this generally means separate bank accounts, separate books, clear title or ownership records for each series' assets, and disciplined recordkeeping for every transaction.

If those formalities are not followed and the lines between series become blurred, a court may allow a creditor to "pierce" the horizontal shield, reaching into the assets of other series or the parent LLC despite the statute's protections. In other words, the liability protection this law offers is earned through consistent compliance, not simply granted by filing the right paperwork.

The Drawbacks and Open Questions

Florida's law is new, and a few practical considerations are worth noting for anyone considering the structure:

It's untested in Florida courts. Because the law just took effect on July 1, 2026, there is no body of Florida case law yet interpreting how courts will apply the new provisions, particularly around when a horizontal shield will or will not be pierced.

Ongoing formalities are demanding. The benefits only materialize if the owner commits to separate recordkeeping and clean asset tracking for every series, indefinitely. Owners who are not disciplined about this may end up with the administrative burden of a series structure lacking the liability protection they were counting on.

Lender and title company familiarity. Because the structure is new to Florida, some banks, lenders, and title insurers may be unfamiliar with it initially, which can create friction when financing or insuring assets held in a particular series.

Interstate and tax treatment can be uncertain. Not every state recognizes series LLCs the same way, and how a particular series will be treated for tax or liability purposes outside Florida is not always straightforward.

A series cannot create its own sub-series. The structure has a defined depth, so business owners with highly layered ownership plans will still need to think through how far the structure can actually take them.

How This Compares to a Holding Company Structure

Business owners weighing a protected series LLC often ask how it stacks up against a more traditional holding company setup, where a parent company owns separate subsidiary LLCs underneath it. The two accomplish similar goals but get there in very different ways.

Entity count and cost. A holding company structure requires forming a distinct legal entity for each subsidiary, each with its own articles of organization, registered agent, annual report, and state filing fees. A protected series LLC, by contrast, is a single legal entity with internal divisions created through a simpler designation filing. For an owner managing many properties or ventures, that difference can add up to considerable savings in formation costs and annual maintenance.

Legal status of the divisions. A subsidiary in a holding company structure is its own free-standing legal entity. It can enter contracts, be sued, and exist entirely independent of its parent, subject only to the ordinary rules of corporate separateness. A protected series, on the other hand, exists only as a segment of its parent LLC. It can sue and be sued in its own name and hold its own assets, but it does not have a fully independent legal existence apart from the series LLC, and it ceases to exist once the parent winds up.

How the liability shield is built. In a holding company, liability protection between subsidiaries comes from the simple fact that each subsidiary is a separate legal entity in the eyes of the law. That separateness is well established and has been tested in courts for decades. In a protected series LLC, the horizontal shield between series is a creature of the new statute itself, and it depends on the ongoing recordkeeping discipline described above. The protection is conceptually similar, but it rests on newer legal ground and on the owner’s compliance with segregation requirements rather than on the entity’s independent status.

Flexibility versus predictability. Series structures tend to be faster and cheaper to expand since adding a new venture may only require a new series designation rather than a full entity formation. Holding company structures tend to offer more predictability, since each subsidiary is a conventional LLC that lenders, title companies, and courts have long experience dealing with. Owners who value speed and lower overhead may lean toward a series LLC, while owners who want maximum certainty, or who plan to bring in outside investors or lenders unfamiliar with series structures, may still prefer separate subsidiaries.

Neither approach is inherently better. The right choice depends on the number and type of assets involved, the owner’s risk tolerance for using a newer statute, and how the business expects to finance, sell, or restructure its holdings over time.

Why Attorney Involvement Matters at Every Step 

Given how the liability shield depends on precise compliance, this is not a structure that lends itself to a do-it-yourself approach. An attorney's involvement matters at each stage:

At formation, counsel can help determine whether a protected series LLC is actually the right fit in comparison to traditional multiple-LLC structures, draft an operating agreement that properly authorizes and governs the series, and ensure the series designations are filed correctly with the Florida Department of State.

In ongoing governance, an attorney can help establish and periodically review the recordkeeping systems, bank account structures, and asset titling practices necessary to keep each series legally distinct. Because the liability shield can deteriorate through simple inattention, a periodic legal check-in is far cheaper than the cost of an unraveled liability shield in litigation.

When issues arise, whether that's a creditor dispute, a lender negotiation, a sale of an asset held in a series, or expansion into another state, having an attorney who understands both the statute and the client's specific structure is essential to protecting what the series was designed to protect in the first place.

Florida's new protected series LLC law offers real advantages for the right business owner, but the protections it promises are conditional, not guaranteed. Working with an attorney from formation through ongoing operations is the best way to ensure those protections hold up when they are tested.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Please consult with an attorney regarding your specific situation.