Although it remains to be tested, I believe CA will uphold the Series LLC. Section (b) below leads me to believe that CA will follow Deleware law even where in conflict with CA law.
CA Corp Code Section 17450. Subject to the provisions of Section 17453:
(a) The laws of the state or foreign country under which a foreign limited liability company is organized shall govern its organization and internal affairs and the liability and authority of its managers and members.
(b) A foreign limited liability company may not be denied registration by reason of any difference between those laws and the laws of this state.
Like you, however, I too am interested in anyone’s actual experience with it.
Posted by Craig S - CA on July 11, 2005 at 21:59:50:
I am located in California, and my CPA recommends using a Series LLC to hold my long term rentals because I can setup only one LLC and setup unlimited numbers of entities within it called ‘Series LLC’s’. I would only need to pay the $800/yr minimum payment on the one LLC. If a tenant gets drunk and hurts himself, he can only sue for the one property, because that is the only property I will hold in that ‘Series LLC’.
Have any of you had a California attorney endorse the use of this for your properties?
I think the Delaware Series LLC is very attractive for holding multiple properties in CA. Unlike many other states, CA will give full force and effect to Delaware corporate laws even if in conflict with CA corporate law.
My primary concern is that the Delaware Series LLC is relatively new in Delaware and hasn’t been tested by the courts. Additionally, from a CA FTB point of view, it has likewise not been tested. My fear is that the CA FTB will determine that each series is subject to the $800, thus eliminateing its primary advantage in CA.
Posted by Craig S - CA on July 12, 2005 at 16:01:52:
I feel confident that you won’t need to pay $800 per series. My CPA assured me that this wasn’t the case and he had just returned from a seminar on the subject. The biggest question seems to be whether CA will uphold the asset protection within a series vs. within the overall LLC. Does anyone have a sample Series formation form? Please email me one if you do.