Florida’s adoption of the new Protected Series LLC legislation, set to take effect on July 1, 2026, marks a significant leap in expanding business flexibility, asset protection, and operational efficiency. This forward-thinking move opens up a world of opportunities for Florida businesses, promising a future of streamlined entity management without compromising liability protection.
This long-anticipated update to the Florida Revised Limited Liability Company Act brings the state in line with the Uniform Protected Series Act (UPSA), a modern framework already utilized in a handful of states known for sophisticated business structures. By doing so, Florida positions itself as a more attractive jurisdiction for companies managing multiple assets, diverse ventures, or high-value operations under one organizational umbrella.
For Florida business owners, real estate investors, family offices, and entrepreneurs with complex portfolios, this change represents a significant opportunity to simplify entity management without sacrificing liability protection. However, the new law also introduces strict compliance and recordkeeping requirements. Understanding these obligations—and preparing for them well in advance of the effective date—is essential to preserving the protections the legislature intended to provide.
What Is a Protected Series LLC?
The Protected Series LLC, a unique type of limited liability company, offers a powerful solution for businesses. It allows the creation of multiple, individually insulated subdivisions known as “protected series.” While these series are not considered separate legal entities under Florida law, they operate as though they are, each with its own rights, obligations, and internal structure. This structure provides businesses with the flexibility to organize various ventures, assets, or activities under a single overarching LLC, while maintaining their legal and financial distinctiveness from one another.
Each protected series functions with a high degree of independence. It may have:
- Its own members and managers, who may or may not overlap with those of the parent LLC.
- Its own assets and liabilities, clearly separated from the parent LLC and other series.
- Its own business purpose, which may be entirely unrelated to the activities of the parent or other series.
- The ability to sue or be sued in its own name, reinforcing its operational separateness.
What makes this structure especially valuable is the statutory recognition of each series as a distinct “person” for purposes such as ownership, contracting, and secured transactions, even though all series exist under one LLC umbrella.
This design allows a single LLC to operate multiple business lines without exposing every asset or activity to the risks of the others. For example, a parent LLC might establish individual protected series for a restaurant, a consulting practice, a real estate portfolio, and equipment holdings. If one series encounters a lawsuit or incurs debt, the assets of the other series are shielded (provided the entity follows the strict recordkeeping and compliance requirements set out in the new law).
How Horizontal Liability Shields Protect Your Business
One of the most valuable features of Florida’s new Protected Series LLC legislation is the introduction of robust horizontal liability shields. These shields are designed to ensure that the financial and legal obligations of one part of the business do not spill over into another.
Specifically, the law provides that:
- Each protected series is insulated from the debts and obligations of the parent LLC.
- The parent LLC is shielded from the liabilities of each individual series.
- Every protected series is safeguarded from the liabilities of all other series within the structure.
This type of protection goes far beyond what traditional LLCs offer. It works in conjunction with the standard vertical liability shield, which already prevents LLC members from being personally liable for the company’s debts.
Together, the horizontal and vertical shields create a multi-layered system of protection that can significantly reduce risk exposure, particularly for businesses managing multiple ventures, properties, or activities under a single entity.
When properly maintained, these protections enable business owners to compartmentalize risk effectively. A lawsuit, contract dispute, or financial issue in one series does not automatically endanger assets held by another. This makes the Protected Series LLC structure especially appealing for companies with diverse assets or operations that naturally involve varying levels of risk.
The Critical Role of Recordkeeping in Protecting Each Series
While Florida’s new Protected Series LLC law offers powerful liability protections, those protections are not automatic. The statute is explicit: the horizontal liability shields only apply if the LLC and each of its protected series maintain precise, contemporaneous, and well-organized records. This level of documentation is essential because it proves that assets and liabilities truly belong to the specific series claiming them.
To remain compliant, each protected series must maintain records that clearly and specifically identify:
- Which assets belong to which series.
- How and when each asset was acquired.
- From whom the asset was acquired or transferred.
- What consideration was paid, including who made the payment and who received it.
These records must be thorough enough that an independent third party—someone with no involvement in the business—could easily distinguish one series’ assets from another’s, as well as from the assets of the parent LLC.
If this separation is not clear, creditors may argue that a particular asset was never properly “associated” with the series claiming protection. In such cases, a court may disregard the series structure entirely, exposing all series and the parent LLC to liability. This risk underscores a simple but critical truth:
Poor recordkeeping can collapse the entire liability shield and undermine the core purpose of forming a Protected Series LLC.
How to Properly Form and Govern a Protected Series LLC
Creating a protected series under Florida’s new law is not as simple as checking a box. The statute lays out specific formation and governance steps that must be followed to ensure each series is valid and entitled to the liability protections the law provides. These requirements are designed to prevent confusion, maintain transparency, and make sure that third parties—such as lenders, investors, and courts—can clearly understand the structure.
To establish a protected series, a Florida LLC must:
- File a protected series designation with the Florida Department of State.
This public filing formally creates the series and puts third parties on notice that the LLC is operating within a protected series framework. - Obtain unanimous member approval, unless the operating agreement explicitly allows for a lesser vote.
This requirement ensures that all members understand and consent to the addition of new liability compartments within the LLC, each with its own rights and obligations. - Maintain a comprehensive operating agreement that clearly outlines the internal rules and governance for both the parent LLC and each protected series.
This agreement should specify:- The procedure for forming, modifying, or dissolving a series.
- How assets and liabilities are allocated and documented.
- The rights, duties, and powers of managers and members within each series.
- Voting rights, decision-making procedures, and governance rules unique to each series.
- Required accounting, reporting, and recordkeeping procedures to preserve the liability shields.
This operating agreement becomes the backbone of the entire Protected Series LLC structure. It ensures consistency and compliance with statutory requirements, serving as the primary reference point in the event of disputes, audits, or litigation.
Ultimately, proper governance and meticulous documentation are critical. Without them, the legal separation between series can break down, undermining the asset protection benefits that make this structure so appealing in the first place.
The Impact on Foreign (Non-Florida) Series LLCs
Florida’s Protected Series LLC law addresses not only entities formed within the state but also establishes clear expectations for foreign series LLCs, which are created in other jurisdictions, such as Delaware, Nevada, Illinois, Texas, or elsewhere. Many of these states have long allowed series LLCs, but their rules vary widely. Florida’s new statute aims to bring consistency to how these out-of-state entities operate within Florida’s borders.
To legally conduct business in Florida, a foreign series LLC must:
- Register with the Florida Department of State, disclosing its status as a series LLC and identifying any individual protected series that will transact business in the state.
- Meet Florida’s recordkeeping and compliance standards, especially concerning asset association, documentation, and liability segregation for each series operating in Florida.
Foreign businesses should understand that Florida courts may not automatically extend the same liability protections that apply in their home states. If a foreign series LLC fails to satisfy Florida’s specific requirements, the liability shields that were valid elsewhere may not be recognized here.
This means that what appears to be a properly formed and protected series in another state may lose its protective benefits once it engages in business activities in Florida, unless the entity takes steps to comply with Florida law.
For any business formed outside of Florida but operating within the state, this makes proactive legal review essential. Proper registration, strong governance practices, and meticulous recordkeeping play a critical role in preventing costly disputes and preserving the internal liability barriers that series LLC owners depend on.
What All of This Means for Florida Businesses
The adoption of Protected Series LLCs marks a significant shift in how Florida businesses can structure, protect, and scale their operations. By allowing one LLC to house multiple protected series, business owners gain access to a level of flexibility and risk management previously available only in a handful of states.
This new structure offers meaningful advantages for a wide range of Florida organizations, including:
- Real estate portfolios managing multiple properties with different risk profiles.
- Investment funds that need to separate asset classes or strategies.
- Professional services firms balancing client work, assets, or divisions.
- Franchise groups operating in various locations or under different brand lines.
- Family-owned businesses looking to segment operations or holdings.
- Companies with multiple business lines, especially when those lines vary in exposure or liability.
- Any enterprise balancing high-risk and low-risk operations within a single ownership structure.
When implemented correctly, Protected Series LLCs can:
- Reduce administrative costs by eliminating the need for multiple separate legal entities.
- Simplify entity management, allowing owners to streamline filings and governance.
- Improve risk segregation, ensuring liabilities remain contained within each series.
- Strengthen asset protection, safeguarding valuable assets from unrelated liabilities.
- Support long-term strategic growth, making it easier to expand, restructure, or diversify.
However, these advantages are not automatic. They depend entirely on proper formation, disciplined governance, and strict compliance with the statute’s recordkeeping requirements. Businesses that cut corners or rely on generic, one-size-fits-all documents run the risk of losing the liability protections that make the structure beneficial in the first place.
For Florida business owners considering this new option, early planning is key. Understanding the requirements now, well ahead of the July 1, 2026, effective date, will ensure the structure is implemented correctly and positioned to deliver lasting protection and flexibility.
How TCLG – The Campbell Law Group Can Help Florida Businesses
TCLG focuses on business and commercial transactions, business and commercial litigation, employer-side employment law, and risk management, with an emphasis on reducing unnecessary conflict while providing strong, strategic representation when litigation is unavoidable.
With the new Series LLC law approaching, our firm can assist Florida businesses by:
- Evaluating whether a Protected Series LLC is the right structure.
- Drafting compliant operating agreements tailored to your business.
- Preparing and filing protected series designations.
- Establishing proper asset segregation and recordkeeping systems.
- Advising on restructuring or converting existing LLCs.
- Providing ongoing guidance to help maintain liability protection.
Although the law will not take effect until July 1, 2026, business owners should begin planning now. A carefully constructed structure and disciplined ongoing management are key to maintaining the liability protections that make a Protected Series LLC such a powerful tool for Florida businesses.
Florida’s new Protected Series LLC law has the potential to transform how your business protects its assets, but only if it’s implemented correctly. If you want to understand how this structure fits your goals or need guidance preparing before the 2026 deadline, contact TCLG today. Our team is ready to help you build a compliant, secure, and future-ready Series LLC strategy.
