Should your Oklahoma series LLC have one bank account or multiple bank accounts?

One goal in using an Oklahoma series limited liability company is to separate the liabilities of different assets within one limited liability company.  For example, the series LLC creates cells within it, and we call the cells “series.”

The magic of the series model

Each series has a name and is intended to be legally separate for all other series.  Series “A” for example, may own a rental home and Series “B” may also own a rental home.  The magic of the series model is if a water heater explodes on the Series “A” property, causing property damage and physical injury, only Series “A” is responsible for the damage, not any other Series.  Liabilities from one series don’t leak into any other series (pun intended).

The need to maintain series separately

One key to securing series LLC protection is to maintain and operate each Series separately.  That means you need to account for each series separately.  As to bank accounts, ideally, each series would have its own bank account, into which all revenue would be deposited and out of which account all expenses would be paid. However, for people with many properties (meaning many series), it is cumbersome and difficult to maintain a separate bank account for each series.  I have clients who own as many as 30 rental properties, and such clients have no interest in using 30 bank accounts.

Using one bank account

When not using separate bank accounts, you must still maintain the ability to track all revenue and expenses for each series separately.  That means the accounting software (e.g., like Quickbooks) can sort and then generate reports for each series’ revenue and expenses.  While not ideal (separate bank accounts would be ideal), depositing funds into one bank account with the ability to track and report funds for each series separately is an alternative.

Posted by Shawn Roberts

I write about and try to answer practical Oklahoma legal questions. I tend to focus on estate planning and business issues. I make a living as an attorney working for Resolution Legal Group in Oklahoma City. I am husband to Amy and the father of Sam and David. We live exactly in the path where the "wind comes sweeping down the plains."