An LLC is an excellent asset protection tool because it has a charging order. The charge order protection arises from the state’s law and is an effective strategy for shielding your assets from attack. It is important to remember that www.youtube.com/watch?v=rsnMiDRxbPU, like anything else in the law, the charging order is subject to change and interpretation at any given time. When forming a limited partnership or limited liability company, you must choose the right state because some states view the statute differently than others.
Keeping up with the latest court cases and trends in limited partnerships is also an important part of staying in touch with your legal team. LLCs have only become popular in the last 25 years in the United States. Only now are we starting to see court decisions that define their scope and use. We will look at section 703 of the Uniform Limited Partnership Act when we return to the original statute.
A judgment creditor may be ordered to pay a debt owed to a partner of a limited partnership by the court by ordering a charge against the partner’s interest. The charging order is a general term. In addition to this, LLCs are also covered by the charging order. A key question to be addressed is whether or not the charging order applies to a single-member LLC. A nationwide trend has emerged against the charging order used to protect single-member LLCs.
Several courts have started to deny LLCs with a single owner, citing the unique nature of charging orders. As a result, single-owner LLCs are not being protected as fully as LLCs with multiple members. The Florida Supreme Court decided Olmstead vs FTC on these grounds in June 2010. When you have a single-owner LLC, you do not have any other members to protect you from. The court ruled that Mr Olmstead’s membership interests could be seized to be collected.
In that case, the property is owned by an Oregon LLC, which a Wyoming LLC owns. Then you invest in a North Carolina property and create a North Carolina LLC owned by the Wyoming LLC. As a result of an incident on your Oregon property, if a tenant sues you personally, not the Oregon LLC, they are suing the Oregon LLC, not you personally. They cannot get into your North Carolina LLC or your equity in your personal property.