“Confidential Asset Protection Series Corporations”
What is a Wilshire Financial CAP Company?
A Wilshire Financial Services CAP is a very special Confidential & Asset Protection company. Also referred to as a Series LLC this corporate structure is a unique form of Limited Liability Company (“LLC”) in which the articles of formation specifically allow for unlimited segregation of membership interests, assets, and operations into separate independent series companies. Each series company operates like a separate entity with it’s own unique business name, it’s own bank account, business credit lines and separate books and records. A CAP SERIES LLC may have many different members, managers, and CFO/Credit Partners in each series. The rights and obligations of these members and managers may differ from series to series. Each Wilshire Financial Services structured CAP Series may enter into separate contracts, sue or be sued, and hold title to real and personal property with confidentially.
The most important characteristics of a Wilshire Financial Services Group CAP SERIES LLC is the confidentiality and the liability and asset protection that is available to each CAP Series. Assets owned by one series are shielded from the risk of liability of other series within the same series LLC. A series LLC is similar in concept to a corporation with several subsidiaries. However, the series LLC concept is designed to segregate risk within separate entities without the cost of setting up new entities.
States Permitting CAP Series LLC
The series LLC is a creation of the state. Only in certain states are series LLCs allowed to be formed. Delaware was the first state to enact legislation authorizing the creation of series LLCs. Several states have followed suit including Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas, Utah and Puerto Rico. Some states, like California, do not allow for series LLCs to be formed under state law but series LLCs formed in other states can register with the state and do business in the state.
Using a CAP Series LLC
As a business entity, series LLCs are very flexible and simple to use. The series LLC can be used by real estate investors who own multiple properties. Each series isolates and protects its properties from the liabilities of the properties in other series. Companies with different profit centers can use series LLCs to segregate and shield each business operation.
To maintain the liability protection of each series it is important to treat each series as a separate company. This includes having a separate bank account, maintaining separate books and records, signing contracts using the name of the series, documenting all transactions, and keeping adequate amounts of capital on hand for business purposes.
There are some unresolved tax issues regarding series LLCs, primarily regarding whether each series is a separate entity for tax purposes. The California Franchise Tax Board has taken the position that each series in a series LLC is a separate entity and therefore must file its own tax return and pay its own LLC annual tax and fee if it is registered to do business in California.
Wilshire Financial Confidential Asset Protection Series Corporations
- DELAWARE CAP SERIES LIMITED LIABILITY COMPANY – $15,995.00
- NEVADA CAP LIMITED LIABILITY SERIES COMPANY – $12,150.00
- TEXAS CAP LIMITED LIABILITY SERIES COMPANY – $9,799.00
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