Florida's New Protected Series LLC: What Business Owners and Investors Need to Know Before July 1, 2026

Florida's New Protected Series LLC

On June 20, 2025, Governor Ron DeSantis signed Senate Bill 316 into law, and Florida joined a select group of states that authorize one of the most structurally powerful business entity tools available under American law: the Protected Series Limited Liability Company. The new law adds Sections 605.2101 through 605.2802 to the Florida Revised Limited Liability Company Act, Chapter 605 of the Florida Statutes, and takes effect on July 1, 2026.

At Munizzi Law Firm, our transactional practice regularly serves real estate investors, multi-venture entrepreneurs, and family enterprises throughout Florida, and we have been preparing for this legislation since the bill cleared committee. We believe the Protected Series LLC will be a genuinely transformative planning tool for the right client profile; but we also believe that it is a structure that will be misunderstood, oversold, and dangerously under-administered if business owners approach it the way many have historically approached traditional LLC formation: as a one-time filing event rather than an ongoing governance discipline.

This article explains what the law does, who it is designed for, and what must happen before July 1, 2026 to position a Protected Series LLC for the durable protection it can provide.

What the Protected Series LLC Structure Does, and Why It Is Different

A Protected Series LLC is a single parent LLC that is authorized by statute to create one or more internal organizational divisions, each called a protected series. Each protected series can hold its own assets, enter into its own contracts, incur its own liabilities, and carry on its own operations, all within the legal framework of the parent entity. A protected series can have its own members, its own managers, its own governance provisions, and its own designated purposes. Critically, the Florida statute recognizes each protected series as a distinct ‘person’ for purposes of property ownership, contracting, and secured transactions, which is a designation that carries meaningful legal weight even though no separate entity is organized, capitalized, or registered with the state.

The core structural benefit that makes the Protected Series LLC worth the attention it has received in the business and legal planning communities is the ‘horizontal’ liability shield. Under Florida’s new law, the debts, obligations, and liabilities of one protected series are not enforceable against the assets of any other protected series or of the parent LLC itself, and vice versa. This horizontal barrier is separate from and in addition to the standard ‘vertical’ liability protection that LLCs have always provided, which shields individual members and managers from personal liability for entity-level obligations. The combination of horizontal and vertical shielding creates a layered liability architecture within a single entity that would previously have required the formation, maintenance, and annual reporting of multiple separate LLCs to approximate.

If you currently hold three investment properties, for example, and you are doing things the right way, then that means that you have three separate asset-protected LLCs, three annual reports, three sets of registered agent costs, and three separate operating agreements. The Protected Series LLC would allow you to consolidate all three into one parent entity with three protected series inside it, one for each property. A slip-and-fall judgment at the DeLand property could not reach the medical office or industrial assets if the records are maintained with the discipline the statute requires. That is a real and meaningful structural benefit. But the administrative efficiency gains come paired with a compliance obligation that I want every client to fully understand before they commit to this structure.

Florida’s Place in the National Landscape

The series LLC concept did not begin in Florida. Delaware enacted the first series LLC statute in 1996, and in the nearly three decades since, more than twenty states and the District of Columbia have authorized some form of the structure. The earliest series LLC laws varied considerably in their terminology, their liability rules, and their procedural requirements, creating an inconsistent national landscape that made cross-state planning difficult and generated interpretive uncertainty that practitioners had to navigate without the benefit of a settled body of case law.

In 2017, the Uniform Law Commission addressed this fragmentation by promulgating the Uniform Protected Series Act — the UPSA — as a model framework designed to standardize the core features of the structure while allowing individual states to adapt the language to their existing LLC statutory architecture. Florida’s SB 316 follows the UPSA framework closely and benefits from the input of the Florida Bar’s drafting committee, which worked specifically to integrate the new provisions with the existing Florida Revised LLC Act’s definitions, governance structure, and procedural requirements. The result is a more internally consistent statutory framework than the earlier patchwork approaches taken by some predecessor states, and one that the Florida Department of State specifically requested an extended delayed effective date — July 1, 2026, rather than the original proposal’s earlier date — to allow its systems and electronic filing infrastructure to be built out and tested before the first designations could be submitted.

The Florida statute also provides formal recognition pathways for foreign series LLCs — entities organized in Delaware, Texas, Wyoming, or other series-authorizing states that seek to register and operate in Florida. For investors and business owners who previously organized their entities in Delaware specifically because Florida did not offer the structure domestically, the new law provides a clear registration framework without requiring dissolution and re-formation. Whether it makes sense to convert or re-domesticate those foreign entities into Florida Protected Series LLCs after July 1, 2026 is a transactional analysis we can work through on a client-by-client basis

How a Protected Series LLC Is Formed

Creating a protected series under Florida’s new law requires both internal governance action and a filing with the Florida Department of State. The internal governance step comes first: the LLC’s operating agreement must authorize the formation of protected series, and unless the operating agreement expressly permits less-than-unanimous action for this purpose, the affirmative vote or written consent of all members of the parent LLC is required before a protected series designation can be filed. This sequencing matters. The operating agreement that governs the structure — including the rules for how series are created, how assets are allocated to each series, how membership and management authority are assigned at the series level, and how conflicts between series are resolved — must be carefully drafted and in place before the first protected series is designated. Attempting to form a Protected Series LLC and create series without a properly structured operating agreement is an error that can compromise the structure from its inception.

Once the operating agreement authorizes it, the parent LLC files a protected series designation with the Florida Department of State. Each protected series must be named in a manner that begins with the full legal name of the parent LLC and includes either the phrase ‘protected series,’ the abbreviation ‘P.S.,’ or the abbreviation ‘PS.’ The parent LLC is required to list all of its active protected series in its annual report filed with the Department of State, ensuring that the existence and identity of each series is maintained as a public record accessible to lenders, creditors, counterparties, and regulators. The registration requirement for each series as a matter of public record is one of the important distinctions between the Florida UPSA-based framework and some earlier series LLC statutes — it provides transparency that counterparties can verify and rely on when evaluating whether they are dealing with the parent LLC, a specific protected series, or both.

The Recordkeeping Obligation

If there is one thing I want every client to take away from this article before they schedule a consultation about the Protected Series LLC, it is this: the horizontal liability shield is not a legal consequence of forming the entity. It is a legal consequence of operating the entity correctly. The shield exists only so long as the recordkeeping requirements of Florida Statutes Section 605.2401 are satisfied. When those records are not maintained — when assets are not clearly segregated, when accounts are commingled, when transfers between series are undocumented, when the records do not permit a reasonable person to identify precisely which assets belong to which series and how those assets were acquired — a court can find that the horizontal shield does not apply and that the assets of one series are reachable by the creditors of another.

What this means practically is that each protected series must maintain: a dedicated bank account used exclusively for that series’ transactions and asset receipts; separate accounting records maintained independently from the parent and from every other series; written documentation created contemporaneously with each asset acquisition identifying the acquiring series, the date of acquisition, the consideration paid, and the source of funds; documented records of any internal transfer of assets between series, including the business rationale and the fair value attributed to the transferred asset at the time of transfer; and an asset allocation methodology in the operating agreement that establishes clear, advance rules for how assets and obligations are assigned to each series on an ongoing basis.

In my experience advising investors who currently hold multiple properties in separate traditional LLCs, most of them already maintain separate bank accounts and keep property-level financial records because their CPAs and lenders require it. That existing practice provides a solid foundation on which to build series-level compliance. But transitioning to a Protected Series LLC is not simply a matter of uploading existing bank account numbers into a new entity structure. It requires a formal asset allocation methodology, contemporaneous written records at the moment of each allocation decision, and a disciplined governance practice that the operating agreement must describe and that the client must actually implement. The legal protection the structure provides is directly proportional to the quality and rigor of the compliance practices that support it.

The Florida Legislature was deliberate in this design. The recordkeeping requirement is the mechanism by which the statute ensures that the series structure is used for legitimate organizational purposes — genuine asset segregation among genuinely distinct operations — rather than as a vehicle for manipulating asset positions in anticipation of or in response to creditor claims. A client who forms a Protected Series LLC but fails to maintain series-level records has not achieved liability protection.

Lender Considerations

One of the questions we are asked most consistently by real estate investor clients considering the Protected Series LLC is how institutional lenders will respond to the structure. The honest answer is that the market has not yet fully standardized its underwriting and documentation practices for Protected Series LLC borrowers, and buyers who plan to finance individual series properties should verify lender acceptability before committing to the structure.

Some institutional lenders — particularly community banks and regional lenders who are accustomed to making loans to single-purpose LLCs — may express discomfort with a loan structure in which the collateral property is held by a protected series rather than a standalone entity with its own independently verifiable balance sheet and creditworthiness. Other lenders, particularly those with more sophisticated commercial real estate practices, will approach the structure with questions that they have already developed protocols for addressing. The core lender concern is not unreasonable: a lender making a non-recourse loan secured by a property held in Protected Series 2 wants confidence that the liability isolation between series is legally durable, that assets of another series cannot be swept in to satisfy obligations of the series holding the collateral, and that its lien and its access to collateral are not impaired by the umbrella structure of the parent.

The practical planning implication is straightforward: if you are an investor planning to use debt financing on properties you intend to hold in a Protected Series LLC, the lender conversation should happen before the structure is finalized, not after contracts are signed. In some cases, the right answer for a particular property within a portfolio may be to hold that asset in a traditional single-member LLC rather than in a protected series — particularly where the lender requires a single-purpose entity with its own independent financial profile. The Protected Series LLC is a planning tool, not an absolute mandate, and the optimal structure for any given portfolio involves a transaction-by-transaction analysis that accounts for both the liability architecture the client wants and the financing structure the client’s lenders can accommodate.

Who Should Seriously Consider a Protected Series LLC

The Protected Series LLC is genuinely well-suited for a defined category of Florida business owners and investors. Real estate investors holding three or more distinct properties with meaningfully different risk profiles — commercial, mixed-use, industrial, multi-family residential — who already maintain rigorous property-level financial records and who face meaningful ongoing liability exposure across their portfolio represent the core use case for this structure. The administrative efficiencies are real, the liability architecture is valuable, and the governance obligations align well with the practices that sophisticated investors already maintain.

Entrepreneurs who operate genuinely distinct business lines under one enterprise — whether under a common brand or separate market-facing identities — are another strong candidate group, particularly where each line carries a different liability profile and the overhead of maintaining separate LLCs for each line is disproportionate to the business’s scale. A marketing agency operating a staffing subsidiary and a web development division, for example, could potentially segregate the liability exposure of each line within a single Protected Series LLC, reducing the entity formation and maintenance costs that would otherwise be associated with three separate organizational structures.

Family offices and family enterprises managing diversified portfolios across generations — particularly those that include a mix of real estate holdings, operating businesses, and investment vehicles — represent a third strong category. The Protected Series LLC can provide both the liability architecture and the organizational clarity that complex family wealth structures benefit from, particularly when the generational transition planning requires the ability to assign different beneficial interests in different assets to different family members without disturbing the overall organizational framework.

At the same time, the Protected Series LLC is not the right structure for every situation, and I would be doing a disservice to clients who asked me about it if I simply recommended it broadly. For a business owner who holds a single commercial property or operates one business line without plans to expand into additional assets, the traditional single-member LLC remains simpler, better understood by lenders and institutional counterparties, and supported by decades of established Florida case law on veil-piercing, liability protection, and operating agreement enforceability. The Protected Series LLC generates its greatest value when the portfolio of assets or ventures is large enough to justify the governance investment the structure requires, when the risk profiles of those assets are meaningfully distinct from one another, and when the client is committed to operating the structure with the ongoing discipline it demands. Adopting it because it sounds more sophisticated is not a sufficient reason.

If you are a real estate investor, multi-venture entrepreneur, or family enterprise and you want to evaluate whether the Protected Series LLC makes sense for your circumstances, I encourage you to contact Munizzi Law Firm before July 1, 2026. The planning work required to implement this structure correctly takes time, and the window before the law takes effect is the right time to do it.

DISCLAIMER: This article is provided for general informational purposes only and does not constitute legal advice. The information contained herein reflects the law as of the date of publication and may not reflect subsequent legal developments. Application of legal principles will vary based on the specific facts of each situation. This article does not create an attorney-client relationship. You should consult with a qualified attorney before taking any action based on information contained in this article. Munizzi Law Firm represents clients in business formation, mergers and acquisitions, commercial real estate, and related transactional matters.