Some states such as Delaware provide for the formation of master-series limited liability companies and limited partnerships ("Series SPVs") that segregate assets and liabilities of a "series" created (by drafting and signing an operating or partnership agreement) under the master. Only the master is required to be formed by filing a certificate of formation with the Secretary of State. Each series may have its own business purpose or defined general partner/manager or partner/member rights, powers, or duties, and with respect to the funding, maintenance, and disposition of the investment assets.
Series SPVs are becoming a more common cost-saving and efficient structure for passive investment funds because they require only one master entity formation with the secretary of state and generally only require one annual franchise tax filing per master.
One of their primary benefits is the more efficient management of multiple separate business activities within a single legal entity.
A potential downside of Series SPVs are that they do not have widely developed case law supporting their judicial treatment, so there is still some degree of uncertainty related to their usage. However, recent statutory developments in Delaware provide for ad hoc registration of series with the secretary of state to address issues related to obtaining certificates of good standing and UCC treatment.
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