Tuesday, January 07, 2003

is my delaware series llc valid in other states?


The U. S. Constitution provides that each State must give full faith and credit to those official acts of the other States. The creation of a corporation is an act of the Secretary of State of the particular State, and therefore must be honored in the other States. So even in States where such an entity cannot be created, it can exist if brought to that State from a State where it was lawfully created.

For example, people will sometimes fly to Las Vegas to get married because of less restrictive residency and time requirements. That marriage is then lawful in all of the States because the States are required to honor that act of the State of Nevada. (Here in Delaware, our Las Vegas is a wedding chapel just across the border, in Elkton, Maryland - or so I have been told).

I have frequently been asked to create Delaware LLC's to be merged with already existing single owner (member) Florida corporations so that the clients can have a single member LLC, in Florida. This is because, as I am told by my Florida colleagues, Florida does not permit a single member LLC. Florida requires that there be at least two owners/members. But by bringing in a single member Delaware LLC, it is legal to operate in Florida.

And so, even if a State's law specifically forbids a Series LLC, you can bring your Delaware Series LLC with you.

What is a Series LLC, anyway? More on that tomorrow.

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