Florida’s New Protected Series LLC: A Horizontal Shield for Property Owners
By Eric Barnes, Commercial Real Estate Sales Associate, MSC Commercial
On July 1, 2026, one of the most significant changes to Florida business law in years quietly went into effect. Florida now permits the Protected Series LLC, or PSLLC, under Chapter 605 of the Florida Statutes. For commercial real estate investors in Sarasota and Manatee County, this new structure deserves a close look, because it changes the math on how a multi-property portfolio can be organized and protected.
Before I go further, an important note: I am a commercial real estate advisor, not an attorney or an accountant. What follows is education, not legal or tax advice. Any decision about entity structure should be made with a qualified Florida business attorney and a CPA at the table. My job is to make sure you walk into that conversation informed.
How We Got Here
Governor Ron DeSantis signed Senate Bill 316 into law on June 20, 2025. The legislation added new sections, 605.2101 through 605.2802, to the Florida Revised Limited Liability Company Act, with an effective date of July 1, 2026. The framework is based on the Uniform Protected Series Act, a model law that a handful of other states had already adopted. Florida’s version was shaped by a Florida Bar task force and includes some Florida-specific adjustments.
The result is that Florida LLCs can now do something they never could before: divide themselves internally into legally separated compartments.
What a Protected Series LLC Actually Is
Here is the structure in plain terms. You start with a regular Florida LLC, which serves as the parent. Attorneys sometimes call it the mothership. That parent LLC can then file a document called a Designation of Protected Series with the Florida Division of Corporations. Each designation creates a protected series, which is an internal cell of the company.
Each protected series can hold its own assets, take on its own debts and obligations, have its own members and managers, and pursue its own business purpose. Under the statute, a protected series is not technically a separate legal entity. It cannot exist without its parent, and it winds down when the parent does. But the law treats each series as a “person” that can own property, sign contracts, and sue or be sued in its own name. In most practical respects, each series behaves like its own LLC.
The mechanics are simple and inexpensive. The designation is filed online through Sunbiz for $25 per protected series. Each series must carry a name that begins with the parent LLC’s name, followed by a separator and a distinguishing identifier. The parent LLC files one annual report, which automatically lists all of its active protected series. One entity, one registered agent, one annual report, many compartments.
The Horizontal Shield, Explained
Every LLC owner already knows the vertical shield, even if they have never heard the term. A traditional LLC separates business liabilities from your personal assets. If the company gets sued, your home and personal savings are generally out of reach.
The Protected Series LLC adds a second axis of protection. The horizontal shield operates between the series themselves. Assets and liabilities assigned to one series are legally isolated from every other series and from the parent. A creditor with a claim against Series A can generally reach only the assets held by Series A. The assets sitting in Series B, Series C, and the parent should remain untouched.
Think of a ship built with watertight compartments. If one compartment floods, the bulkheads keep the water from spreading and the ship stays afloat. That is the design intent of the horizontal shield: one problem stays in one compartment.
Why This Matters for Commercial Real Estate
Real estate investors are widely expected to be the biggest users of this structure, and it is easy to see why.
The standard asset-protection playbook has long been one LLC per property. It works, but it multiplies costs. Five properties meant five filing fees, five annual reports, five registered agent bills, and five sets of formation documents. Investors often faced an uncomfortable tradeoff between protection and overhead, and some responded by stacking multiple properties into a single LLC, which concentrated risk instead of spreading it.
The PSLLC is designed to break that tradeoff. An investor can now hold a retail strip on one series, a flex building on another, and an office condo on a third, all under a single parent LLC. If a slip-and-fall claim arises at the retail center, the statute is designed to keep that claim from reaching the flex building or the office condo. Meanwhile, the administrative load stays consolidated: one annual report, one registered agent, and a $25 filing each time a new series is added.
For growing portfolios, the structure also scales cleanly. Acquiring a new property can mean designating a new series rather than forming and papering an entirely new company.
The Fine Print: This Shield Is Earned, Not Given
Now for the part that deserves the most attention. The horizontal shield is not self-executing. It does not exist simply because you filed a designation and paid $25. It exists only as long as the structure is operated correctly, and the statute sets real requirements.
The core obligation is recordkeeping. Florida’s law requires records that clearly associate each asset with a specific series. In practice, advisors recommend that each series maintain its own bank account, its own books, and its own contracts signed in the correct series name. Deeds, leases, insurance policies, and vendor agreements all need to identify the right series. Move money casually between series, let the books blur together, or sign documents under the wrong name, and a court may find that the separation was never real. At that point, the compartments can fail exactly when you need them.
There are other open questions worth understanding. This is brand new law in Florida, and there is essentially no court precedent interpreting it yet. Lenders, title companies, and insurers are still developing their policies for underwriting series-held assets, and some may require extra documentation or simply prefer traditional single-purpose LLCs, especially on financed deals. Courts in states without protected series laws may or may not honor the internal shields for assets or disputes located there. And on the tax side, the IRS and other taxing authorities may treat each series as its own taxpayer, which adds complexity that your CPA needs to plan for up front.
One more technical point: out-of-state LLCs cannot directly create Florida protected series. A foreign LLC would first need to form or domesticate a Florida parent entity.
Questions to Bring to Your Advisors
If you are considering this structure, a productive first meeting with your attorney and CPA should cover a few things. Ask whether your portfolio’s risk profile actually justifies the added operational discipline, because a PSLLC demands more bookkeeping rigor than a single LLC, not less. Ask how your existing lender relationships and loan covenants would respond to moving properties into series. Ask how each series should be classified for federal and state tax purposes. And ask what your recordkeeping systems need to look like on day one, since the shield depends on them.
The Bottom Line
The Protected Series LLC gives Florida investors a genuinely new tool: a single entity with internal, legally isolated compartments, each holding its own assets and liabilities behind a horizontal shield. For multi-property owners, the potential savings in cost and complexity are real. So is the discipline required to keep the protection intact, and so is the uncertainty that comes with any brand new law.
Used carefully, with good legal and tax guidance, it could become the default structure for commercial portfolios in our market. Used carelessly, it is a false sense of security with a $25 price tag.
If you own commercial property in Sarasota or Manatee County, or you are building toward your first acquisition, structure and strategy go hand in hand. I am happy to talk through your portfolio goals and connect you with experienced local attorneys and CPAs who are already working with this new law. Let’s talk.
Eric Barnes is a licensed Florida Commercial Real Estate Sales Associate and Realtor with MSC Commercial, focused exclusively on commercial properties in Sarasota and Manatee Counties. This article is for educational purposes only and is not legal, tax, or financial advice. Consult a licensed Florida attorney and a CPA before forming or restructuring any business entity.