Banking and the Series LLC: FAQs

It's time for everyone's favorite part of life: banking! We're kidding. We kind of hate banking too. That's why when we set up Series LLCs for our clients, we like to avoid any kind of potential banking issues while keeping the basics of bookkeeping and taxes as streamlined as possible. If you're a banker, great! Go listen to a podcast or read an article on something you don't have expertise in. For the rest of us, read on to understand the basics of banking with your SLLC.All You Need to Understand About Record Keeping for your LLC

Why is the accounting so important?

• If you don't manage it correctly all of the series can collapse into one and everything that we thought we have accomplished by isolating each of the assets essentially goes out of the window. Now we have one big pot of money: a tempting thing for somebody who wants to sue you to go after.

Setting up Banking for Your Series LLCDo we need any other information to set up the business bank account?

• No, just the standard information to set up a business bank account, including an EIN.

When opening a bank account for the business, what business name do I use? How do I go about obtaining an EIN for that purpose?

• You would create the bank account using the name of the business in which you are opening a bank account for - whether that is the name of the LLC, an individual Series, or a trust. The instructions for obtaining an EIN by internet, mail, telephone, or fax, are found here on the IRS web site.

Does each individual Series need its own bank account and credit card?

• This will depend on your own record-keeping abilities. A Series LLC, including each individual Series, can utilize one bank account and credit card IF, AND ONLY IF, you are accounting for the money separately for each individual Series.

If I set up my bank account with the Parent Series LLC EIN in the state in which I live, is the Parent Series LLC considered doing business in that state and must register?

• The bank may require the Parent Series LLC to be registered in the State if you go to a Big Box Bank, but if you go to a Credit Union or smaller bank they may not require registration. There is no legal requirement to have an LLC registered in the state where you open the account. We have a relationship with a bank and you are able to open an account remotely, without ever stepping into their branch, and has a great online platform for internet banking.

Will any changes need to be made if using one business account for all properties and utilizing Quickbooks to track the revenue/expenses of each series using class tracking? If a different bank account for each property acquired in the Series LLC is desired, do we open them in the name of the parent Series LLC or the individual Series?

• A Series can have its own bank account and credit card IF, AND ONLY IF, you are accounting for the money separately for each Series. If you think you are going to get sloppy with your accounting, then it is important to have separate bank accounts and separate credit cards. If the Series is operating under a DBA, then the DBA name can be used for the bank account. You would create the bank account using the name of the business in which you are opening a bank account for - whether that is the name of the LLC, an individual Series, or a trust.