Tag Archives: llc

Hedge Fund Series LLC

The Series LLC

Most hedge funds are structured as either limited partnerships or as limited liability companies (LLCs).  Some hedge funds, however, are structured as series limited liability companies.  The series limited liability company is a relatively new statutorily created entity.  The series LLC is one entity with a group of series each of which is bankruptcy remote from each other series.  This means that the assets of one group or series of assets are protected in the event another group or series of assets becomes subject to suit or other action.  This article discusses the primary uses for the Series LLC in the hedge fund industry, the advantages and disadvantages of the series LLC and other issues involved with the formation of a hedge fund as a series LLC. Continue reading

Overview of Schedule K-1 for Hedge Fund Investors

Hedge funds are usually established as Delaware limited liability companies (LLC) or Delaware limited partnerships (LP).  In addition to providing investors with a certain amount of liability protection (generally to the extent of their investment), these vehicles are also more tax efficient than other structures like corporations because LLCs and LPs can be taxed as partnerships.  Unlike a corporation which is subject to double taxation (that is, tax at both the corporate level and the investor level), a partnership is only subject to tax at the investor level. Continue reading