Florida Protected Series Companies
Effective July 1st, 2026

For many Florida users, the structure is best understood as a middle ground between one ordinary LLC and many separate LLCs. It is especially attractive when one umbrella business owns multiple ring-fenced assets or projects — rental properties, franchise units, equipment fleets, SPV-style investments, or brand and product lines — and wants internal liability partitioning without paying for a separate annual report and separate state entity maintenance for every silo.

The tax picture is favorable but nuanced. Under s. 605.1103, a Florida LLC taxed federally as a partnership or a disregarded single-member entity is generally not subject to chapter 220 corporate income tax. Florida's corporate income tax rate under s. 220.11 is 5.5% for taxable years beginning on or after January 1, 2022. The liability shield works best only when the protected series is properly named, consistently reflected in the operating agreement, and supported by rigorous associated-asset and associated-member records.

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Statutory Framework and Legislative History

Florida adopted the structure by enacting CS/SB 316, titled "Limited Liability Companies," with companion CS/HB 403. The bill was filed in January 2025, passed the Senate on April 3, 2025, passed the House on April 29, 2025, was approved by the Governor on June 20, 2025, and became Chapter 2025-162 on June 23, 2025. The effective date is July 1, 2026.

The new statute package is centered in ss. 605.2101–605.2802, which Florida names the "Uniform Protected Series Provisions." Core definitions include: protected series as a series established under s. 605.2201; series limited liability company as a domestic LLC with at least one protected series; and associated asset and associated member as terms defined by the statute's recordkeeping architecture.

One legislative-history wrinkle practitioners may encounter: a Senate Rules committee analysis cited an effective date of January 1, 2026. That was not the enacted result. The final bill history and the codified statute control — s. 605.2802 sets the operative date as July 1, 2026.

The Florida Department of State, Division of Corporations, moved quickly once the law took effect. You cannot directly file a "Florida Series LLC." Instead, an existing active Florida LLC designates protected series under it. The online form auto-populates the parent LLC's name, and the filer enters the series-specific portion. Filing fee per designation: $25.

Operational Mechanics Under Florida Law

Two statutes define the structure. First, s. 605.2103 provides that a protected series is a person distinct from the parent series LLC, other protected series, members, and transferees. Second, the Division of Corporations confirms a Florida protected series is not a separate entity and will not have its own Sunbiz page or record/document number. Legal separateness exists for rights, duties, and liability partitioning; administrative separateness in the public filing record does not.

Under s. 605.2104, a protected series has the capacity to sue and be sued in its own name and generally has the same powers and purposes as the parent LLC. It may not itself become a member of the parent LLC or establish another protected series. The protected series ceases to exist no later than completion of the parent LLC's winding up.

Formation Sequence

The formation sequence is strict. Under s. 605.2201, all members of the LLC must affirmatively vote or consent to establish a protected series. The two easily overlooked steps are the unanimous member approval and the registered-agent agreement required by s. 605.2203(2) before filing.

Naming Rules

Under s. 605.2202, the protected series name must comply with Florida's general LLC naming rules, must begin with the parent LLC's name, and must contain "protected series," "P.S.," or "PS." The Division's online form auto-populates the parent name and adds a dash separator; the filer enters the second portion.

Recordkeeping: Where the Liability Partition Lives

Under s. 605.2301, only an asset of the protected series may be an associated asset of that series, and the series must maintain records describing the asset with enough specificity for a disinterested reasonable person to identify and distinguish it from assets of the parent LLC or sibling series.

Liability segregation is strong but conditional. s. 605.2401 turns off cross-liability between the parent and its protected series. But s. 605.2402 expressly allows creditors to reach non-associated assets, and veil-piercing-type disputes are analyzed under ordinary law-and-equity principles.

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Best-Use Scenarios and Economic Value

The best candidates are businesses with multiple assets, projects, or risk compartments but a common ownership and governance nucleus. Florida real-estate investors are the obvious first wave: one umbrella LLC can place each rental property into a different protected series while keeping a single state annual report. Franchise groups are another natural fit: each store or territory in its own series, centralized management at the parent level.

A second scenario fits operating businesses. A Florida restaurant group owning one catering business, one food-truck operation, and two brick-and-mortar stores can isolate vendor contracts, payroll centers, permits, and insured risks more cleanly, while still centralizing senior management and member voting at the parent-LLC level.

Who benefits less? Single-asset owners get little from the extra architecture. Firms in heavily regulated businesses — health care, financial services, alcohol, firearms — may find that agencies, banks, insurers, or lenders still prefer traditional separate entities. Businesses that are sloppy about records generally do not benefit, because the statute's liability partition depends entirely on record discipline.

Protected series should be viewed as complementary to insurance, not a replacement. A prudent Florida user usually wants both. For professional guidance on how entity structure interacts with your financial administration and reporting obligations, that coordination is exactly the kind of planning McGregor Financial Services supports.

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Tax Treatment: Florida and Federal

Florida State Tax

Florida state tax consequences depend heavily on federal tax classification. Under s. 605.1103, a Florida LLC taxed federally as a partnership, or a single-member LLC disregarded for federal income tax purposes, is generally not subject to chapter 220. An LLC classified as a corporation falls into Florida's corporate income/franchise tax system at 5.5% (s. 220.11, taxable years beginning on or after January 1, 2022).

For sales and use tax, Florida's general state rate is 6%, with local surtax layered on by county. Each protected series operating a distinct storefront, warehouse, or rental location may need its own operational tax setup even if the Sunbiz footprint sits at the parent-LLC level.

For tangible personal property, anyone who owns taxable TPP on January 1 must file a TPP return with the county property appraiser by April 1 — a separate return for each site. There is a TPP exemption of up to $25,000 of assessed value if the return is timely filed.

Federal Tax

The most directly relevant federal guidance is Treasury's 2010 proposed regulations on series LLCs. The key planning proposition: one Florida protected series may remain disregarded; another may be a partnership; another may elect to be a corporation — series-by-series election flexibility combined with state-law risk partitioning.

A domestic LLC with two or more members defaults to partnership status unless it elects corporate treatment. A domestic LLC with one owner defaults to disregarded entity status unless it elects corporate treatment (26 C.F.R. § 301.7701-2).

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Structure Comparison

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Pitfalls to Avoid

Confusing Designation with Segregation

Filing the protected-series designation is necessary, but not sufficient. Florida's liability architecture depends on the asset actually being an associated asset of the right series, the member actually being an associated member, and records being detailed enough for a disinterested reasonable person to identify and distinguish the asset. If that record architecture fails, Florida expressly allows enforcement against non-associated assets.

External-Party Friction

The protected series gets no separate record/document number and no separate annual report. That lowers state-friction costs, but it can create proof issues with banks, lenders, title companies, or counterparties who expect every operating silo to have its own searchable public record. Florida mitigates this through certificates of status for protected series — use them proactively.

Over-Customizing the Operating Agreement

Florida lets the agreement govern many internal matters, but s. 605.2107 forbids varying the effect of numerous core statutes, including the distinct-person rule, naming rules, associated-asset rules, and major liability provisions. Drafters should use a modular series schedule, but cannot contract around the statute's load-bearing protections.

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Recommended Next Steps

• 1

  Select the use case first, not the form.

  Protected series deserves consideration only where associated-asset and associated-member schedules have real business meaning.

• 2

  Build the operating agreement as a series architecture document.

  Specify how series are formed, who the associated members are, what rights attach to each protected-series interest, and how managers are appointed — all while respecting s. 605.2107.

• 3

  Treat asset association as a litigation file, not a bookkeeping note.

  Deeds, bills of sale, leases, contracts, insurance schedules, fixed-asset ledgers, and bank accounts should all point to the same protected series by its full Florida statutory name.

• 4

  Prepare a tax-classification memo before operations begin.

  Decide, series by series, whether the intended federal classification is disregarded, partnership, or corporate, then align EINs, payroll, and Florida chapter 220 expectations accordingly.

• 5

  Do not let state-filing savings drive the whole decision.

  The state-fee savings are real, but they can be outweighed if your bank, investor, insurer, title company, or regulator is uncomfortable with a nontraditional structure.

• 6

  Use certificates of status proactively.

  Florida expressly authorizes certificates of status for domestic protected series — they may be the simplest evidentiary bridge for counterparties who otherwise see only the parent LLC on Sunbiz.

• 7

  Calendar compliance at the parent level.

  The parent LLC's annual report must list each active protected series. Omission can block status certificates even if it does not destroy the series itself.

Financial Administration Implications for Series LLCs

One area practitioners and business owners often underestimate is the accounting and financial administration burden that comes with a properly maintained protected-series structure. The liability partition only holds when the financial records consistently reflect it. That means:

• Separate books and bank accounts for each protected series
• Payroll records that correctly identify which series employs which workers
• Vendor invoices coded to the correct series
• Capital expenditures and asset records linked to the right series designation
• Tax filings and EIN assignments aligned with the intended federal classification per series

Businesses that rely on a single bookkeeper or spreadsheet for the entire umbrella LLC are at risk of collapsing the very partitions that the statute creates. The series structure demands — and rewards — rigorous back-office discipline. If your business is considering a protected-series structure or already operates one, contact McGregor Financial Services to discuss how your books, payroll, and reporting should be organized to support it.