Many corporations own and operate more than one business, and what's more many individual real estate investors own multiple properties legally titled under a single name or business entity. A problem with "single-pot" ownership of multiple businesses or property is that any legal liability that relates to one business or property will jeopardize the other assets. Therefore, most owners of related businesses and real estate investors with several properties seek to separate ownership so that lawsuits against a single business or property will not jeopardize the owner's other investments. Traditionally, liability segregation meant setting up new and different business entities to own each business or each property. As the businesses grow, multiple entity ownership can become complicated and expensive.

The Delaware legislature created a new type of legal entity aiming to solve this planning problem by permitting a single limited liability company to own multiple subsidiary limited liability companies each of which owns a single-asset business. This new entity is known as The Delaware Series Limited Liability Company (LLC.) Although a Series LLC has to be created in Delaware, it can register to do business or own property in any other state. This innovative concept allows one LLC to establish a separate series, or units, under the same LLC umbrella. Each unit of a Series LLC can own distinct assets, incur separate liabilities, and have different managers and members. A Series LLC pays one filing fee and files one income tax return each year.

Under Delaware statutes, liability sustained by one unit does not cross over and jeopardize assets titled in other subsidiary units of the same Series LLC. Although the same liability isolation can be achieved in any state with multiple entities, in theory the Delaware Series LLC offers superior and more economical asset protection under a single roof.

There are several practical applications for a Delaware Series LLC. One use is ownership of multiple parcels of real estate in separate series within a Delaware Series LLC. This is less expensive then creating, filing, and maintaining several different LLCs to segregate property ownership. Second, an operating business would benefit from a Delaware Series LLC if the business should own real estate used in its operations. If the business were formed or merged into a Delaware Series LLC, one series could own the real estate and a different series could operate the business. Liability incurred by the business operations would not jeopardize the real estate. Additionally, there should be no sales tax due on rent paid by the operating series to the real estate series. Another benefit of a Delaware Series LLC is the ability in transferring assets among related businesses without income tax on built-in gain or liability for real estate transfer taxes.

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