Although series accounts may create certain BSA/AML challenges for your institution, they are permissible in Illinois, and we are not aware of any specific requirements or restrictions for opening these accounts.

However, from the customer’s perspective, series LLC accounts may not be advisable. To maintain liability protection, each series LLC must be treated as a separate company, which entails maintaining separate books and records, and that typically includes separate bank accounts. If a series LLC co-mingles its finances with another series LLC or with the master LLC, a creditor may find it easier to “pierce the corporate veil” and hold that series LLC liable for the debts of the other LLCs. Consequently, if your customer wishes to proceed with opening series LLC sub-accounts, they should be sensitive to this issue.

For resources related to our guidance, please see:

• Illinois Limited Liability Company Act, 805 ILCS 180/37-40(a) (“An operating agreement may establish or provide for the establishment of designated series of members, managers or limited liability company interests having separate rights, powers or duties . . . .”)

• Illinois Limited Liability Company Act, 805 ILCS 180/37-40(b) (“{I}n the event that an operating agreement creates one or more series, and if separate and distinct records are maintained for any such series and the assets associated with any such series are held (directly or indirectly, including through a nominee or otherwise) and accounted for separately from the other assets of the limited liability company, or any other series thereof . . . then the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets of such series only, and . . . none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the limited liability company generally or any other series thereof shall be enforceable against the assets of such series.”)