A buyer’s counsel I work with on the buy side called me on a Tuesday in early May with a fact pattern that did not exist twelve months ago. His client was acquiring a Florida-formed LLC operating in a multi-property real estate vertical, the LOI had been signed in late April, and his diligence checklist was running through ordinary territory — corporate good standing, capitalization, member consents — until his junior associate flagged a line in the target’s operating agreement that referenced a “protected series.” The associate did not know what a protected series was. The buyer’s counsel was not sure either. He had heard of the Delaware version. He had not realized Florida now had its own.
Florida does. As of July 1, 2026 — about five weeks from when I am writing this — Sections 605.2101 through 605.2802 of the Florida Revised Limited Liability Company Act take effect, creating a statutory framework for Protected Series LLCs that is conceptually similar to the Delaware structure but procedurally distinct. The legislation was signed by Governor DeSantis on June 20, 2025, sat in the books for a year, and is now coming online during a stretch of summer deal volume when Florida-formed LLC targets are common on buy-side desks. The diligence checklists have not caught up. The forms have not caught up. The reps and warranties package has not caught up. And the founders selling Florida LLCs in the back half of 2026 are walking into a transitional period in which the answer to “does the target have any protected series” is going to be asked, with increasing frequency, by buyers who do not yet know how to evaluate the answer.
This post is the operating note I would want every deal lawyer running a Florida LLC target through diligence in July, August, or September of 2026 to have read. It is also the operating note I would want every founder selling such a target to have read, because the seller-side disclosure obligations begin before the buyer’s diligence question does.
What the new statute actually creates
A Florida Protected Series LLC is an LLC that has, by election in its operating agreement and by filing with the Florida Department of State, established one or more “protected series” within itself. Each protected series is treated, as a matter of Florida law, as a separate legal person for purposes of asset segregation and liability shielding. Assets that are properly associated with a particular series are insulated from the creditors of the other series and of the umbrella LLC itself, subject to the statute’s record-keeping and notice requirements.
The structural model the statute follows is the Uniform Protected Series Act promulgated by the Uniform Law Commission in 2017. Florida is the more faithful UPSA adopter; Delaware, contrary to a common assumption, did not adopt UPSA. Delaware has had its own series statute since 1996 — 6 Del. C. § 18-215, the “protected series” provision — and in 2019 added a separate “registered series” concept at § 18-218 that resembles, but is not, the UPSA model. Florida counsel who reach for the Delaware playbook will find the moves familiar but the mechanics different. The Senate bill page for CS/SB 316 collects the legislative history, and the substantive provisions live at Sections 605.2101 through 605.2802 of the Florida Statutes. Each series can have its own members, its own managers, its own contributed assets, its own books and records, and its own debts and obligations. The liability shield between series is the headline benefit, and the operational complexity of maintaining it is the headline cost.
For most ordinary operating businesses, the Protected Series LLC is not a useful structure. The administrative overhead — separate books for each series, separate signage and contract-counterparty notice, separate compliance with the protected-series-designation filing and the associated-asset record-keeping rules — outweighs the asset-segregation benefit. The structure is built for multi-property real estate portfolios, multi-fund investment vehicles, multi-IP licensing arrangements, and similar fact patterns where the operator has a strong economic case for separating asset pools without spinning up multiple LLCs and the federal tax framework that comes with them.
For M&A purposes, the question is not whether the structure is widely useful. The question is whether the target has elected into it — and if so, what that means for the transaction.
Why the standard Florida protected series LLC M&A diligence checklist will miss this
The Florida LLC diligence checklist that most deal lawyers run on a target in 2026 was built for the regime that existed before July 1. It asks the right questions for unitary LLCs and asks no questions about series, because series did not exist as a Florida concept. A buy-side checklist that does not have a line item for “does the target maintain any protected series under Sections 605.2101 et seq., and if so…” will not surface the series structure until counsel happens to read the operating agreement carefully or until the Sunbiz record reveals a protected series designation on file.
The exposure for the buyer is asymmetric in three ways. First, the buyer may be acquiring less than the buyer thinks. If the target has elected protected series treatment and the seller’s representation of the “Company” means only the umbrella, the buyer is not getting the assets sitting inside the protected series unless the agreement is drafted to reach them. Second, the buyer may be acquiring more than the buyer can manage. If the target has multiple protected series, the buyer is inheriting the segregation discipline that came with the structure and will need to either dissolve the series post-closing or maintain the administrative regime. Third, and most subtly, the buyer may be acquiring an asset whose value depends on the series shield holding up — and the shield holds up only if the seller maintained the statutory record-keeping and notice obligations during the pre-closing period.
The diligence questions are concrete. Did the seller file the protected series designation required under Section 605.2201 and any required statements of designation change? Did the seller maintain separate records associating specific assets and liabilities with each series? Did the seller use separate names and identifying information in contracts with third parties? Did the seller comply with the periodic reporting obligations? The answer to any of these being “no” or “partially” is a potential challenge to the series shield in subsequent creditor litigation, and the buyer is the entity that will inherit that challenge. A buyer who has not run these questions through diligence has not actually diligenced the target.
The drafting fixes on the merger agreement
Three drafting moves should be standard on any Florida LLC target acquired on or after July 1, 2026, and they should appear on counsel’s first checklist whether or not initial diligence has identified series usage.
The first is a specific representation about series. The rep should say, directly: the target has not elected protected series treatment under Sections 605.2101 through 605.2802 of the Florida Statutes; no protected series has been established within the Company; the operating agreement contains no provisions authorizing the establishment of a protected series; no protected series designation has been filed with the Florida Department of State; and the Company has not held itself out as a Protected Series LLC. If any of those is wrong, the rep flips to its inverse form and the disclosure schedule carries the specific series detail. Either way, the rep forces the seller to confirm a binary fact at signing.
The second is a covenant against series formation between signing and closing. The interim period covenant should restrict the seller from electing protected series treatment, filing a protected series designation, amending the operating agreement to authorize series, or admitting any third party as a member of any series. The covenant looks paranoid until one considers that a seller under closing pressure has occasionally restructured the target’s holding to optimize state-tax treatment, and a sophisticated tax adviser working on a Florida LLC in 2026 may suggest a series formation as a pre-closing restructuring move. The covenant takes that move off the table without buyer consent. The interaction with the rest of the Florida LLC default rules also matters — the operating agreement quietly overrides the statutory member-consent defaults in ways the series election can compound.
The third is a structural definition of what the buyer is acquiring. If the target has elected protected series treatment and the deal contemplates the buyer acquiring the umbrella plus all series, the agreement needs to define “Company” to include all series. If the deal contemplates the buyer acquiring less than all series — a use case that may arise more often than one would expect, particularly in real estate roll-ups where the target sells off specific properties — the agreement needs to define exactly which series are in and which are out, and the disclosure schedule needs to inventory series-level assets and liabilities with the same care that the standard asset-list schedule applies to umbrella assets. The standard M&A diligence framework assumes a unitary target. The series structure breaks that assumption.
The seller-side disclosure obligation
For founders selling Florida LLCs in 2026 and 2027, the disclosure obligation begins at the LOI and certainly no later than the data-room population. A founder whose entity has elected protected series treatment, has filed a protected series designation, has multiple series operating, or has even amended the operating agreement to authorize series treatment without yet filing — all of these are facts that buyers will ask about and that founders should disclose proactively, in writing, at the diligence kickoff.
The reason for proactive disclosure is that the series structure carries a remediation cost. If the books and records are not in compliance with the statutory regime, the cleanup work needs to happen pre-signing or pre-closing. If the structure was elected for asset-segregation purposes that have lapsed, the dissolution of the series may need to happen pre-closing to simplify the buyer’s diligence and to clean up the target’s filings. None of this work can be done during the closing-week sprint, and a buyer who discovers a series election late in the process is a buyer who has to repaper the deal.
For founders whose entity has not elected protected series treatment, the disclosure is shorter but is still worth making affirmatively. “The Company has not elected protected series treatment under the new provisions of Chapter 605 effective July 1, 2026” is one line on the seller’s diligence response, but it is the line that gets a sophisticated buyer to move past this question quickly. The buyers who will not have the question on their checklists yet are mid-tier buyers without Florida-specific counsel, and the seller’s affirmative statement saves the deal a round of questions later.
The transitional period and what comes next
The first quarter of practice under any new statute is the quarter in which the conventions and the form work are not yet settled. The Florida bar is in the process of generating practice commentary — the Florida Bar Journal has run preliminary explainer pieces on the statute — and the practice forms from the major Florida firms will catch up to the statute over the next several months. Until they do, the diligence and drafting will be uneven across deals, and the seller who walks into a transaction with documents and disclosures that are ahead of the buyer’s checklist tends to get the cleaner deal. The corporate-governance practice at the firm has been tracking the statute since the legislative session, and the operating note above is the kind of front-edge framing I would want a Florida LLC founder thinking through before going to market. The Chapter 605 issues that arrive alongside a series election — including appraisal-rights exposure on a downstream merger — are worth thinking about in the same sitting.
The series structure is a tool. It is not the right tool for most operating businesses, and it is decidedly not the right tool for a business preparing for sale. But the existence of the tool, as of next month, changes the diligence question and changes the seller’s affirmative disclosure obligation. Founders going to market in the second half of 2026 should be prepared for the question, and buyers acquiring Florida LLCs in that window should make sure the question is on the checklist.
If you are a Florida LLC founder approaching a sale and want a second read on whether the new series provisions touch your structure, or a buyer’s counsel running diligence on a Florida LLC target and want a Florida-side practitioner’s view from our Fernandina Beach office, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
