Florida Bar Journal

Florida’s New Protected Series LLC Law: Part I

This article is the first of a two-part series designed to give readers the “what, how, and why” of Florida’s new protected series LLC legislation (§§605.2101 – 605.2802 of the Florida Revised Uniform Limited Liability Company Act, F.S. Ch. 605). This article (Part I) describes what a protected series LLC is, addresses how a protected series LLC differs from a Florida limited liability company that is not a protected series LLC, explains how and where the concept of a “protected series” originated, addresses why Florida added the new protected series LLC entity to Florida’s existing choice of business entity list, details key aspects of a Florida protected series LLC, identifies how a Florida protected series LLC is formed, how a protected series of a Florida protected series is established, and how the Florida protected series LLC and its protected series must be operated in order to secure the benefits of desired liability shields. It also identifies special non-uniform rules applicable to the association of real property to a protected series LLC or a protected series of a protected series LLC, addresses how a protected series LLC and/or a protected series of a protected series LLC is dissolved and wound up, and addresses restrictions on entity type transactions (such as mergers, interest exchanges, conversions, and domestications) for a protected series of a protected series LLC.

Part II provides a deeper dive into key operating agreement aspects of a protected series LLC, identifies the most important positive and negative aspects of a protected series LLC, and will address when a protected series LLC is best utilized, and when it probably should not be utilized, by businesses in Florida. Part II is expected to be published in the July/August 2026 issue of The Florida Bar Journal.

The Florida Protected Series LLC Legislation

The Florida protected series LLC legislation was introduced to the 2025 Florida Legislature in companion Bills, H.B. 403 sponsored by Rep. Jenna Mullicka-Persons (R-Lee County), and S.B. 316, sponsored by Sen. Lori Berman (D-Broward County), and was overwhelmingly passed into law by the Florida House and Senate, then signed into law by Florida Gov. Ron DeSantis in 2025, with a delayed effective date of July 1, 2026.

The delayed effective date of July 1, 2026, was utilized to accommodate the filing and administrative burdens that the legislation imposed on the Division of Corporations within Florida’s Department of State (department). The department rightfully identified the need for additional time 1) to develop forms and certificates relating to both Florida protected series LLCs as well as foreign (non-Florida formed) series LLCs (foreign series LLCs), which have registered, or will be registering, to do business in Florida; and 2) to the extent necessary, to incorporate updates to its software and filing systems in order to administer the new protected series LLC-related filings.^[1]

All records filed with the department on or after the effective date of July 1, 2026, by Florida protected series LLCs or by a Florida protected series, by any foreign series LLC, or any foreign “protected series” or foreign “registered series,” must comply with the filing requirements set forth in the new Florida protected series LLC provisions, which filing requirements apply to all Florida protected series LLCs and all foreign series LLCs conducting business in Florida.

What Is a Florida Protected Series LLC?

A Florida protected series limited liability company (a “protected series LLC” or also referred to as a “PSLLC”) is a new type of Florida limited liability company that will have the ability to “designate” one or more “protected series” (also referred to as a “PS”) within the PSLLC, through which the PSLLC and each of its protected series may conduct completely different business activities, be owned by different associated members, be managed by different associated managers, have different associated transferees, purchase, finance, hold and operate different associated assets, incur different associated liabilities, maintain different bank accounts, maintain different financial and accounting records, file separate tax returns for the PSLLC and for each protected series, all while limiting the exposure to liability to creditors of the PSLLC and each protected series because of expanding the existing LLC vertical liability shield to the relationship between the PSLLC, on the one hand, and each of its protected series, on the other hand, coupled with the new horizonal liability shield (both of which liability shields are explained further below).

In essence, one can think of a Florida protected series LLC as if it were a form of holding company, whereby instead of a parent entity owning a group of subsidiaries, the protected series LLC would be the sole legal entity, with one or more separate protected series that each operate their own business activities separate and apart from one another and separate and apart from any business or operations of the PSLLC.

A good example of when the concept of a protected series LLC might be utilized is a real estate investment fund that raises capital from investors who wish to invest in diversified real estate projects (e.g., raw land, developed commercial shopping centers, office buildings, multi-family housing, single family housing, apartments, hotels, and land to develop into data centers) while segregating the assets and liabilities for each type of project. Each of the different categories of real estate investments (or each project) can be placed into a separate protected series, and then investors can choose which of the protected series they want to invest in and which they want to avoid. The fund will allocate the investments of each investor as directed by such investor. If the statutory requirements of the protected series LLC legislation are followed, each protected series of investment portfolios or investment project will be able to isolate the ownership, management, activities, profits, and losses within each of the protected series investment options, with each protected series maintaining its own books and records and being isolated from the associated assets and associated liabilities of each of the other protected series and from the PSLLC.

The Vertical and New Horizontal Liability Shields

There are two distinct liability shields in a PSLLC. The first is the traditional vertical liability shield, which is present in all Florida business corporations, LLCs, LLPs, and limited partnerships, which shields the owners (i.e., shareholders, members, limited partners, LLP general partners, etc.) from liabilities of the entity such that creditors of the entity cannot enforce claims against the entity by suing the owners of the entity. There is an exception to the general rule applying the vertical shield — i.e., when circumstances are such that the entity creditors can “pierce the veil” of the entity to reach the assets of the owners.

The new additional liability shield in a protected series LLC is often referred to as a “horizontal” liability shield. This new liability shield, which many might designate as an “internal shield,” relates not only to a liability shield between and among each of the protected series, but also to a liability shield between the PSLLC, on the one hand, and each of its protected series, on the other hand. This novel horizontal liability shield has two aspects to it: non-liability and non-recourse protection.

The non-liability rule protects the protected series LLC, as well as each protected series, from liability for the debts and obligations of one another. The non-recourse rule limits creditor recourse to only the associated assets of the debtor PSLLC, or the associated assets of the specific protected series, which incurred the initial liability to that creditor. This dual natured horizontal shield protection occurs only if the required recordkeeping rules in the new protected series provisions are followed.

This critical aspect of the new legislation is of paramount importance in utilizing a protected series LLC, in limiting creditor claims against the associated assets of the PSLLC and the associated assets of each of the protected series designated by the PSLLC.

• An Example of the Horizontal Shield — Assume that a bank creditor loaned funds to Protected Series A of a protected series LLC to build a new hotel on property owned by Protected Series A and filed a lien on the property and all other associated assets of Protected Series A as collateral for the loan. A loan default occurs and the bank creditor obtains a judgment against the associated assets of Protected Series A. The bank creditor forecloses on all the assets of Protected Series A, which were properly covered by the lien. However, the assets of Protected Series A are not sufficient to satisfy the lien judgement, so the bank creditor then seeks to satisfy the judgment by making claims against the PSLLC and/or against the associated assets of the PSLLC and the associated assets of the other protected series formed by the PSLLC.

If the statutory recordkeeping requirements of the protected series LLC legislation are followed, the new horizontal shield will statutorily protect the protected series LLC and all of the other protected series from the bank creditor’s claims against the associated assets of the PSLLC as well as the associated assets of each of the other protected series formed and maintained by the PSLLC.

One caveat to the above — the horizontal shield is also subject to traditional “veil-piercing” principles under Florida law creating the potential for cross-over liability exposure where the statutorily required record-keeping requirements for “associated assets” and “associated liabilities” have not been clearly observed by the protected series LLC or the respective protected series of the PSLLC.

Genesis and Background of the New Law

Florida’s new protected series LLC provisions are based on the work of two committees: 1) the Protected Series LLC Drafting Committee of the Uniform Law Commission (ULC),^[2] which began studying the “series” construct for unincorporated business entities in 2011, and concluded their work resulting in the Uniform Protected Series Act (UPSA) in 2017; and 2) The Florida Bar Business Law Section Protected Series LLC Task Force (task force), which drafted and promoted the adoption of the Florida protected series LLC legislation.

Florida adopted the protected series LLC legislation in response to the increasing popularity of series LLCs nationwide and the rising adoption of laws allowing for the formation of series LLCs in multiple states with different series LLC laws.

As of the date this article was prepared, there were 24 jurisdictions that permit the formation of one or more form(s) of series LLC: most notably, Delaware, but also Texas, Illinois, Nevada, Montana, Wyoming, and other populous and commercially important states. In each of those states, the series LLC legislation may include significantly different statutory requirements for their respective versions of a series LLC. Given the significant differences in state laws addressing series LLCs, the ULC determined it was time to try to bring some measure of “uniformity” to series LLCs by adopting UPSA.

The ULC process started in 2011, when the ULC Series Study Committee broadly examined the “series” construct, and began drafting provisions for use in the ULC’s four principal Unincorporated Business Organization Acts: LLCs, partnerships, limited partnerships, and statutory trusts. The ULC undertook the study for all four unincorporated entities, in large part because Delaware then permitted “series” to be utilized in four Delaware “alternative entities” statutes: the Delaware LLC Act (Ch. 18, Tit. 6), the Delaware Partnership Act (Ch. 15, Tit. 6), the Delaware Limited Partnership Act (Ch. 17, Tit. 6), and the Delaware Statutory Trust Act (Ch. 38, Tit. 12).

The first draft of the ULC Protected Series Drafting Committee’s attempt at “series” legislation in 2013, was a draft entitled, “Series of Unincorporated Business Entities Act,” which included series provisions for all four uniform unincorporated business organization acts (LLCs, partnerships, limited partnerships, and statutory business trusts).

Ultimately, after input from numerous ULC commissioners and ABA advisors during drafting sessions, and multiple drafts of various possible “series” provisions for all four statutes, the ULC Series Drafting Committee settled on limiting the new “protected series” construct solely to LLCs, which approach was first presented in UPSA at the ULC Annual Conference in 2014.^[3] There followed subsequent versions of UPSA in 2015 and 2016, which evolved into the 2017 version of UPSA.

Florida’s Protected Series LLC: Background

Between 2017, when Florida’s Protected Series Task Force first started considering UPSA, and 2025, when the Florida legislation was enacted, representatives of The Florida Bar Business Law Section, representatives of The Florida Bar Tax Section, and representatives of The Florida Bar Real Property, Probate, and Trust Law Section, along with representatives of the title insurance industry, and representatives of the Florida Division of Corporations, conducted extensive meetings and compiled numerous “Florida tweaks” to UPSA. The tweaks made to the Uniform Protected Series Act provisions were based on important preexisting Florida LLC provisions, which the task force wanted to continue, as well as concerns expressed by Florida’s real property lawyers and title insurance lawyers who identified issues and requested revisions to be consistent with real property title and related recorded filings affecting real property in Florida (recording mortgages, liens, etc.) most of which were generally adopted by the Florida Protected Series Task Force.

The real property-related Florida tweaks address concerns regarding: 1) associating a real property asset or liability with either the protected series LLC and/or one or more protected series; 2) the interplay with recorded title to real property, liens on real property, and other records or instruments affecting real property, which are recorded in local real property recording offices around the state; and 3) the authority of the persons signing those records, and the status of such records for purposes of satisfying “associated real property assets or liabilities.”

These non-uniform provisions are reflected in §§605.2301(2)(b) and 605.2301(3)(b) of the new law. Another non-uniform change of importance was an expansion of the “extrapolation” concept in UPSA (which limited the concept of extrapolation to apply only to specified enumerated sections identified in UPSA), which non-uniform expansions are reflected in §605.2108. “Extrapolation” is the application, by analogy, whereby the default rules governing Florida’s LLC Act are expressly made applicable to the protected series LLC, and to each protected series of the PSLLC.

The Florida Bar Task Force decided that a broad application of extrapolation to the default rules of Ch. 605 was advisable for Florida to avoid confusion and make it clear that the default provisions of the existing Florida LLC Act would also be applicable to any Florida protected series LLC and any protected series, except where explicitly stated otherwise in any protected series provisions in §§605.2101 – 605.2802. This Florida tweak is reflected in the addition of subparagraph (3) in §605.2108.

The “Mothership”

Under the new provisions, a Florida protected series LLC will be a unique type of Florida entity. One might think of a Florida PSLLC as the overarching LLC (sometimes colloquially referred to as the “mothership”) and each protected series designated by the mothership being a “protected series.”

Each protected series of a Florida protected series LLC is statutorily treated as if it were a separate LLC in almost all respects, but is forever tied to the mothership, since a Florida protected series cannot exist independently of the mothership, and must be terminated and dissolved when the mothership is terminated and dissolved.

A protected series, if properly established and maintained, with proper recordkeeping, and clear identification of each protected series’ respective associated members, associated managers, associated assets, associated liabilities, and stated business purpose of each protected series, can exist and be operated entirely different and apart from the mothership’s activities and affairs as well as entirely different and apart from each other protected series designated by the mothership.

A protected series of a Florida protected series LLC, is explicitly recognized as a “person” within the meaning of the Uniform Commercial Code, and is deemed to be a separate person from the PSLLC, and separate from any other protected series created by the PSLLC, which can do all of the following in its own name: 1) establish its own associated members and/or associated managers; 2) raise its own capital; 3) enter into and enforce contracts; 4) acquire, hold, encumber, and sell or transfer associated assets; 5) incur its own associated liabilities; 6) grant liens and security interests; 7) sue and be sued in its own name; 8) engage in any business or activity separate and apart from the mothership, or any other protected series designated by the mothership; and 9) terminate its activities and affairs without impacting the mothership or any other protected series of the mothership.

The protected series LLC and each designated protected series functions as if each were an independent LLC, and, subject to certain naming requirements set forth in the protected series LLC provisions, may conduct business under distinct names. The most significant naming requirement is that the name of each Florida protected series must begin with the name of the protected series LLC.

Filings With the Department

Under the new Florida protected series LLC provisions, a protected series may be formed by a Florida limited liability company by the filing of a certificate of designation of a protected series with the Florida Department of State, whereupon that Florida limited liability company would then be considered a “protected series limited liability company” or simply a “protected series LLC.”^[4] Stated differently, a Florida limited liability company becomes a Florida protected series limited liability company once it designates one or more “protected series” in its operating agreement and files a protected series designation with the Florida Department of State.

A protected series created by a protected series LLC is not a separate and distinct legal entity; however, the new Florida provisions explicitly state in §605.2103, that each protected series is considered to be a “person” fully empowered to conduct its own business activities in its own name, with its own assets and liabilities.^[5]

Further, a protected series is “deemed” to be treated “as if” it was a separate limited liability company subject to the provisions of the Florida LLC Act, governed by all of Ch. 605, and any other Florida laws applicable to a limited liability company.^[6] The explicit use of the term “person” in describing a protected series is, in part, designed to assure that it is deemed a “person” within the meaning of Uniform Commercial Code (UCC) art. 1 and, therefore, constitutes an “organization” that can be a debtor under the UCC.^[7]
Section 605.2104(3) provides that a protected series of a protected series LLC cannot exist on its own; its existence is dependent upon the existence of the PSLLC that “designated” the protected series.^[8] Section 605.2501(1) further reflects this reality by stating that the dissolution of the protected series LLC statutorily causes the dissolution of each protected series of the dissolved PSLLC.^[9] Section 605.2502(5) also reflects this reality by providing that a dissolved protected series LLC will not be considered as having completed its own “winding up” until the PSLLC has completed the winding up of each protected series created by the PSLLC.^[10]

The Record-Keeping Requirements

• Fundamental Aspects of “Association” and Required Recordkeeping by Clear, Consistent and Separate Records — The Florida protected series LLC and related protected series construct has the following fundamental aspects:

1) An identifiable set of assets and liabilities are segregated within the Florida PSLLC and within each protected series of the Florida PSLLC;

2) the Florida PSLLC and each protected series of the Florida PSLLC is empowered to conduct its own activities in its own name;

3) the Florida PSLLC’s and each protected series of the Florida PSLLC’s “associated assets” must be identified by thorough recordkeeping that distinguishes the protected series assets from assets of the PSLLC and from assets of any other protected series of such PSLLC;

4) the Florida PSLLC’s and each protected series of the Florida PSLLC’s associated assets are obligated solely to persons asserting claims pertaining to activities related to the segregated assets;

5) the Florida PSLLC’s associated assets are not available to persons asserting claims arising from the activities of any of the protected series of the PSLLC;

6) each protected series associated assets are not available to persons asserting claims arising from the activities of the PSLLC or any other protected series of the PSLLC;

7) one or more members of the PSLLC may be associated with one or more protected series, but are not automatically members associated with a specific protected series; however, if no members of the PSLLC are “associated with” a protected series, the PSLLC itself is deemed to be the associated member of that particular protected series;

8) distributions arising from the assets and activities of a protected series go either: to the members associated with that particular protected series, if any; or if the protected series has no associated members, to the PSLLC as the sole deemed “associated member.”

Section 605.2301 addresses the association of assets of a protected series or of the protected series LLC, and the record-keeping requirements to assure proper “association” of assets among the PSLLC and/or any of its protected series.^[11]
The fundamental record-keeping requirement to properly associate an asset with a specific protected series is set forth in §605.2301(2)(a).^[12] That provides:

[O]nly if the protected series creates and maintains records that state the name of the protected series and describe the asset with sufficient specificity to permit a disinterested, reasonable individual to:

1. Identify the asset and distinguish it from any other asset of the protected series, any asset of the protected series limited liability company, and any asset of any other protected series of the mothership;

2. Determine when and from which person the protected series acquired the asset or how the asset otherwise became an asset of the protected series; and

3. If the protected series acquired the asset from the Protected Series LLC or another protected series of the PSLLC, determine any consideration paid, the payor, and the payee.

There are parallel rules for the association of an asset within the protected series LLC itself, which appear in §605.2301(3)(a).^[13] Also notable is the intended expansive latitude given to the requirements for such recordkeeping, whereby records may be: “organized by specific listing, category, type, quantity, or computational or allocational formula or procedure, including a percentage or share of any asset, or in any other reasonable manner.”

• Special Rules Applicable to Real Estate Assets Held by a Florida Protected Series — It is important to note that both §§605.2301(2)(b) and 605.2301(3)(b) include non-uniform language designed to make it clear that deeds and other instruments granting an interest in real property to, respectively, a protected series or a protected series LLC or affecting real property owned by, respectively, a protected series or a PSLLC that is properly recorded, and is in favor of a person who gives value without knowledge of the lack of authority of the person signing and delivering the instrument, is conclusive as to such authority and also has the effect of being a record for purposes of associating the asset or liability with the respective protected series or the PSLLC.

• Dissolution and Winding Up of a Protected Series and a Protected Series LLC — New §605.2501 sets forth five grounds for dissolution of a protected series (three of which are non-variable): 1) when the associated protected series LLC is dissolved (non-variable); 2) upon the occurrence of a dissolution event specified in the operating agreement; 3) upon the affirmative vote or consent of all associated members of the respective protected series; 4) by court order upon application by an associated member or protected-series manager of the particular protected series, applying the same grounds for dissolution as apply to a limited liability company as those grounds are set forth in the Florida LLC Act (non-variable); and 5) by court order issued upon application by the PSLLC, or a member or manager of the particular protected series under current §605.0702 (non-variable).^[14]
A dissolved protected series winds up its activities and affairs in the same manner that a dissolved limited liability company winds up its activities and affairs. Judicial supervision or another judicial remedy is available in the winding up of a protected series to the same extent and under the same conditions and same effects that apply in the Florida LLC Act to a Florida limited liability company under current §605.0709(5).

• Entity Transactions Restricted — The construct of a protected series being a “person” rather than a “legal entity” places significant limitations on what a protected series may do when it comes to entity transactions; actually, it is more about what a protected series “may not do” in connection with entity transactions. New §605.2602 provides that a protected series may not: 1) be an acquiring, acquired, converting, converted, merging, or surviving entity; 2) participate in a domestication; or 3) be a party to or be formed, organized, established, or created in a transaction substantially like a merger, interest exchange, conversion, or domestication.^[15]
There are also restrictions in new §605.2603 that apply to the protected series LLC, which has created a protected series. A PSLLC may not be: 1) an acquiring, acquired, converting, converted, domesticating, or domesticated entity; or 2) except as otherwise provided in §605.2604, a party to or the surviving company of a merger or a transaction with the same substantive effect as a merger.^[16]
There is intentionally only one channel whereby a protected series may be a party to a merger, and that is only if it is as a part of a merger of its associated protected series LLC, but “only if” 1) each party to the merger is a limited liability company; and 2) the surviving company is not created in the merger.^[17]

The rationale for the very narrow channel through which a protected series may travel in a merger or other entity transaction (such as an interest exchange, conversion, or domestication) is tied to the fundamental concept that the protected series is not actually a separable legal entity and cannot exist independently of the protected series LLC.

Consequently, the only way a protected series can survive a merger is if the protected series LLC engages in the merger whereby the PSLLC does not survive the merger, the surviving entity is a PSLLC or a foreign series LLC and the protected series survives the merger as a protected series of the PSLLC or foreign series LLC that is the survivor in such merger.

Conclusion

Part II addresses Florida operating agreement matters that should be addressed in a Florida protected series LLC; the Florida legislation provisions applicable to foreign series LLCs and their equivalent to a “protected” series that registers to transact business in Florida; the variety of series LLC acts available in other states, and other issues and questions which surround the use of a foreign series LLC and their equivalent or version of a “protected” series. Note that several states treat series of a series LLC as a distinct legal entity, so there will be important distinctions in series LLCs formed in other states when they conduct business in Florida.

This column is submitted on behalf of the Business Law Section, Stephanie Lieb, chair, and Kathleen DiSanto, editor.