How do I know if a firm is a Sub LLC?

Discussion in 'Prop Firms' started by monty21, Jul 7, 2008.

  1. This may be a dumb question, but what is the definition of a sub-llc? Is there a difference between a Limited Liability Company and a sub-llc?

    In my research of the prop industry, I keep coming across forums stating that the firm is a sub-llc... so I would just like some clarification.

    If a firm is connected to another company, such as a broker-dealer, does that in any way contribute to this "sub" definition (considering it may be an affiliate)?

    In the prop business, I would imagine that if a prop firm is associated/affiliated to other well established companies, that should make it more legitimate (in most places). Is this kind of thinking correct?
  2. Good question. For example, our traders are all members of the main LLC (Bright Trading, LLC). Some firms have allowed small groups of traders to form an LLC within their LLC and end up with something like: XYZ trading who is a member of ABC trading. If XYZ trading has problems, then the traders have no recourse to ABC trading.

    Everyone on here knows that I'm not a fan of Sub-LLC's, and that most traders simply choose to join the "main" LLC. But, there probably are some good sub's out there, just do you due diligence as always.

    All the best,