A series limited liability company is an entity that allows for the creation of separate ventures ("Portfolios") as part of one LLC. Each Portfolio will typically have separate liabilities, assets, management, and members. Since there is only one entity filed with the applicable state, costs for forming new entities are avoided, administrative fees and costs are reduced, and one filing with the SEC possibly can be used for multiple Portfolios (as compared to forming a separate LLC for each venture). Delaware was the first to allow for SLLCs, and a few other states now provide for them.
SLLCs are not widely used. One reason for this is that the IRS has never provided any direct guidance on how the separate Portfolios would be treated for income tax purposes. This dearth has ended - the IRS has issued a private letter ruling dealing with the subject.
Under the ruling, the IRS has indicated that each Portfolio will be treated as a separate entity for tax purposes. While the IRS did not come out and specifically say that the Portfolios within each Series LLC are to be treated as separate entities, it implied this when they said that each can make its own entity characterization selection under the check the box rules and entity characterization rules.
Perhaps similar to the way that LLCs exploded in popularity once the federal income tax consequences of their use was ruled on by the IRS, this ruling may result in broader use of SLLCs. In this regard, it would be helpful if the IRS issued guidance in the form of a Revenue Ruling or Regulations, since taxpayers other than the recipient of a private letter ruling are technically not permitted to rely on private rulings issued to others.