PSA’s Business Plan to Include Formation of LLCs


The PSA Security Network has launched the first or what it says will be many Limited Liability Companies (LLC). The first LLC, called Virtual Distribution & Management, will be followed by another LLC in May.

PSA’s strategic business plan calls for the creation of independent LLCs, which are intended to provide the dealer group greater flexibility. PSA says this will enable it to better meet changes in the marketplace as well as offer new opportunities and savings to member firms.

According to PSA, cooperatives by their very nature are not investment vehicles, which limits their ability to raise equity capital. PSA will continue to operate according to a policy of limited membership, which is a benefit to existing PSA members but a disadvantage to meeting vendor growth expectations. By having separate LLCs, PSA can offer new channels for product distribution while lowering member costs and meeting PSA vendor expectations. The LLCs are then able to partner with others to gain access to other revenue streams in new markets that are not currently available.

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