“Umbrella LLC” seems like a great term for those who live in Seattle. Funny enough most “umbrella” LLCs that we see are based in very dry states. If you want to chat about whether you are sheltered from a litigation storm, book an initial call with me at https://livemorecarefree.com/
On another note: our blog has been named as a Top 10 Asset Protection Blog over at Feedspot.com! It’s so nice to be noticed 🙂
What is an umbrella LLC? That’s a term that you may have seen in various places on articles or forums, and an umbrella LLC is, is similar to what you may have heard called a holding company, right? An umbrella LLC owns other LLCs that are beneath it. So the idea is that this umbrella shelters the other LLCs beneath it from the storm of possible litigation.
Let’s go to the board and see what that structure looks like.
Now as this beautiful art demonstrates, you have your umbrella LLC up here, at the top, and you see like the umbrella? Under the umbrella LLC you got your sub LLC one, sub LLC two, sub LLC three. These three LLCs are owned by the single umbrella LLC, so they’re consolidated up in there. And this umbrella shelters these little guys down here from this torrential rain.
An umbrella LLC is typically formed in a state that offers additional creditor protections, right? Especially if this is a single member LLC. So some of those popular States are Wyoming, Nevada, Delaware. If you’re going, if you’re going really above and beyond, maybe the Cook Islands or Nevis. And the umbrella LLC makes it easy to manage those multiple business interests. They end up in consolidated into one entity. And the idea as well is that those LLCs that are beneath the umbrella, those help insulate the liabilities or what other, whatever other risky activities are being held down those other ones, you know, typically you’d think of like rental properties, so those would be each be sitting in their own LLC, which is then owned by the umbrella LLC, sheltering it from the rain.
Colin Ley is an asset protection attorney and the co-founder of LayRoots (along with with partner in life & business – Shreya Ley)