Florida has long been known as one of the most business-friendly states in the country – and it just took another big step in that direction. On June 20, 2025, Governor Ron DeSantis signed Senate Bill 316 into law, creating a new type of business structure called a “Protected Series LLC.” This new law updates Florida’s rules for limited liability companies (Chapter 605, Florida Statutes) and takes effect July 1, 2026, giving the state time to set up the necessary filing procedures.
For business owners, real estate investors, and their lawyers or advisors, this is one of the biggest changes to Florida business law in recent memory – and it opens up powerful new options for protecting your assets.
What Is a Protected Series LLC?
The new law allows Florida to join a growing number of states that authorize a single parent LLC to create multiple protected series, where 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.
Each protected series is treated almost like its own separate LLC – it can enter into contracts, sue and be sued in its own name, and hold its own property. However, it is not technically a separate legal entity. It exists under the umbrella of the parent LLC and winds down when the parent LLC closes.
Vertical and Horizontal Liability Shields
A traditional LLC gives you what lawyers call a “vertical” shield — it keeps your personal assets separate from your business. In other words, if your LLC gets sued, creditors generally cannot come after your personal bank account or home. The Protected Series LLC adds a second layer of protection on top of this.
The new “horizontal” shield works between the different series within the same LLC. Each series keeps its own assets and debts separate, so a creditor with a claim against one series can generally only go after that series – not the others.
In plain terms: one series is generally not on the hook for another series’s debts. If Series A owns Property A and gets hit with a lawsuit, Series B’s Property B should be safe – as long as you follow the rules.
How Is a Protected Series Formed?
To create a protected series, a Florida LLC files a “protected series designation” with the Florida Department of State. Each series must have a name that starts with the parent LLC’s name and includes the words “protected series,” or the abbreviations “P.S.” or “PS.” From there, each series can have its own members, managers, assets, and debts – all kept separate from the parent and the other series.
Both brand-new LLCs and existing LLCs can use this structure. The law also creates a process for out-of-state series LLCs that want to do business in Florida.
Who Should Consider This Structure?
This structure is ideal for anyone managing multiple assets or business lines who wants strong liability protection without the cost and hassle of setting up a completely separate LLC for each one. Here are the most common use cases:
- Real estate investors: Perhaps the most common use case — real estate investors can hold each property in a separate series. If one property faces a lawsuit, the others are shielded from liability.
- Business owners with multiple ventures: If you run more than one type of business, you can put each one in its own series – reducing risk and keeping operations clean and organized.
- Simplified management: You can run everything from the parent LLC at the top level while keeping each series’ finances and records separate. One management structure, multiple protected buckets.
A Real-World Example: The Real Estate Investor
Administrative Efficiency
Imagine Sarah, a Florida real estate investor who owns four properties: a single-family rental home in Orlando, a duplex in Tampa, a small retail strip in Jacksonville, and a vacation rental in Destin. Today, Sarah has two options — put everything in one LLC (and risk all four properties being exposed if any one of them is sued) or form four separate LLCs (which means four sets of annual fees, four registered agents, four operating agreements, and four sets of books). Neither option is great.
Under the new Protected Series LLC law, Sarah forms a single parent LLC — let’s call it “Sarah Properties LLC” — and then files four protected series designations with the Florida Department of State:
Sarah Properties LLC – Protected Series 1 (Orlando Rental)
Sarah Properties LLC – Protected Series 2 (Tampa Duplex)
Sarah Properties LLC – Protected Series 3 (Jacksonville Retail)
Sarah Properties LLC – Protected Series 4 (Destin Vacation Rental)
Each property is titled in the name of its respective series. Each series has its own bank account, its own lease agreements, and its own set of records.
Now suppose a tenant at the Orlando rental property is injured on the premises and files a lawsuit. Under this structure, the lawsuit is directed at Protected Series 1 only. The Tampa duplex, Jacksonville retail strip, and Destin vacation rental — held in Series 2, 3, and 4 — are shielded from that claim. The creditor cannot reach those properties to satisfy a judgment against Series 1.
At the same time, Sarah only files one annual report with the state (listing all four series), pays one registered agent fee, and operates under one parent operating agreement. She saves the cost and administrative burden of maintaining four completely separate LLCs — while achieving the same (or better) level of liability separation.
The key, of course, is that Sarah must keep scrupulous records for each series, never mix funds between series, and work with her attorney to ensure the structure is properly maintained. Done right, this is one of the most efficient and protective ownership structures available to a Florida real estate investor.
One of the biggest practical advantages of the Protected Series LLC is saving time and money. Rather than paying annual fees, registered agent costs, and filing expenses for five separate LLCs, you pay once for the parent and file a single annual report that lists each of your protected series. It is a much leaner way to run a multi-asset operation.
Can Each Series Have Different Owners?
Yes — and this is one of the most powerful and flexible features of the Protected Series LLC. Under Florida’s new law, each protected series can have its own members (owners) and managers, who may or may not overlap with those of the parent LLC or other series. In other words, the ownership of each series can be entirely different from series to series.
Here is what that means in practice:
Same owners in every series: The simplest scenario is where one person (or a group of people) owns the parent LLC and each of its series. This is common for solo real estate investors or closely held family businesses that simply want to segregate assets.
Different owners across different series: A more sophisticated use of the structure is bringing in outside co-investors at the series level. For example, Sarah from our earlier example might want to bring in a business partner to co-own only the Jacksonville retail property. She can make that partner a member of Protected Series 3 (Jacksonville Retail) only — without giving them any ownership interest in the parent LLC or any of the other series. Her partner has a stake in that one property and nothing else.
Mixed ownership entirely: You could have a structure where you own 100% of the parent LLC and Series 1, own 60% of Series 2 with a co-investor owning the remaining 40%, and own 50% of Series 3 with a different partner. Each series keeps its own set of books, its own membership interests, and its own economic arrangement.
This ownership flexibility makes the Protected Series LLC particularly useful for real estate joint ventures, family investment structures, and entrepreneurs who want to bring in different partners for different projects — all without the cost and complexity of forming a separate LLC for each deal.
One important caveat: when series have different owners, the tax picture becomes more complex. A series with two or more members is generally treated as a partnership for federal tax purposes, which means it will likely need its own EIN and will be required to file its own partnership return (Form 1065) and issue Schedule K-1s to each member. A series with only one owner would typically be treated as a disregarded entity. As discussed in the tax section above, early coordination with a CPA is essential — especially when different series have different ownership structures.
The Critical Caveat: Compliance Is Non-Negotiable
The liability protection this structure provides is powerful – but it is not automatic. It only works if you follow the rules, every single day.
The law requires each series to keep clear, separate records of its assets and debts. If you fail to maintain those records properly, a creditor could argue that the walls between series should be ignored – allowing them to reach the assets of other series or the parent LLC.
The law also strictly prohibits moving assets between series in order to cheat creditors. Each series must keep its own bank accounts and financial records. Mixing funds across series – even unintentionally – weakens your liability protection. Regular bookkeeping and periodic legal check-ins are not optional; they are essential to keeping the structure intact.
The bottom line: a Protected Series LLC can be a tremendous shield – but only if you run it properly. Cutting corners on recordkeeping or commingling funds can unravel the very protection you set up.
Tax Considerations: How Does a Protected Series LLC File Its Taxes?
One of the most important — and least settled — questions about the Protected Series LLC involves taxes. The short answer is: it depends, and you need to work with a qualified tax advisor before you set this structure up.
At the federal level, the IRS has not yet issued final regulations on how Protected Series LLCs are taxed. However, under proposed IRS regulations issued in 2010, each individual series within a Series LLC is treated as a separate entity for federal income tax purposes. In practical terms, this means that if you have a Protected Series LLC with four series — like Sarah in our example above — the IRS may require four separate federal tax returns, one for each series, rather than a single return for the whole structure.
Each series that is treated as a separate entity for tax purposes will also generally need its own Employer Identification Number (EIN) from the IRS. The tax classification of each series — whether it is treated as a disregarded entity, a partnership, an S corporation, or a C corporation — depends on how many members it has and what elections are made. For example, a series owned by a single person is generally treated as a disregarded entity by default, meaning its income flows directly onto that owner’s personal tax return. A series with multiple members is generally treated as a partnership by default, which requires filing a partnership return (Form 1065) and issuing Schedule K-1s to each member.
Importantly, this is where the tax picture diverges from the administrative picture. While you file a single annual report with the Florida Department of State listing all of your series, you may still be required to file multiple federal tax returns — one for each series that the IRS treats as a separate taxpayer. The administrative savings at the state level do not automatically carry over to the federal tax side.
On the Florida state tax side, Florida does not impose a personal income tax, which is a significant advantage for owners whose series income flows through to them personally. However, Florida has not yet issued specific guidance on how Protected Series LLCs will be treated for state tax purposes. Owners and their advisors should monitor guidance from the Florida Department of Revenue as the July 1, 2026 effective date approaches and beyond.
The bottom line on taxes: do not assume that one LLC means one tax return. Depending on your structure, you may have multiple federal filing obligations, each with its own EIN, and you should budget for that complexity when evaluating this structure. Early coordination between your legal counsel and your CPA is essential.
What About Florida’s Charging Order Protection?
Florida already has one of the strongest asset protection laws in the country for multi-member LLCs. Under existing law, if a creditor wins a judgment against one of your LLC’s members personally, they cannot simply seize that person’s ownership stake in the LLC. The most they can do is obtain what is called a “charging order” – essentially, a right to receive any distributions if and when they are paid out. The Protected Series LLC builds on top of this existing protection, making it one of the most robust asset protection tools available in Florida when used correctly.
How to Get Started
The Florida Bar’s Drafting Committee made several non-uniform changes and additions to the new legislation in order to better integrate it into the Florida Revised Limited Liability Company Act, which means this is not a one size fits all, fill in the blank product. Forming a Protected Series LLC requires careful attention to the operating agreement, the protected series designation, the proper naming of each series, clear recordkeeping protocols and an understanding of the ongoing requirements you will need to follow to keep liability shields in place.
Whether you own rental properties, run multiple businesses, or are simply planning ahead for growth, the Protected Series LLC may be one of the best planning tools now available to you in Florida. Contact our office to talk through whether this structure makes sense for your situation and how to get it set up correctly before the July 1, 2026 effective date.