5 ms·

You bring up a very nuanced point regarding the direction of liability for single member LLC. As you state, it is correct the owner will generally be protected

You bring up a very nuanced point regarding the direction of liability for single member LLC. As you state, it is correct the owner will generally be protected from the liabilities of the LLC. With the exception of piercing the corporate veil, alter ego doctrine, ect... However, single member LLC can be liable for the debts of the sole owner. Meaning the business assets can be attached, charging orders issued and ownership can even be foreclosed. To distinguish if I own stock in say Google or Apple, and I am in a car accident and kill someone and I can't pay a judgement obviously the judgment holder can not collect against Apple/Google even though I am an owner; however, they could collect against an LLC I own if it is single member. Alternatively, if the same LLC was multi-member generally the judgment holder could not satisfy the judgment against the multi-member LLC. Edit: In fairness, Patio11 expressed concerned about the liability from his LLC flowing to him personally. Nevertheless, I always feel it is relevant to consider personal liability flowing to the LLC.

dragonwriter 12y ago
Generally, charging orders can be issued against any LLC for a member's debts (all a charging order does is require that the LLC pay any distributions that would go to the member to the creditor instead; a charging order to an LLC for a members debt is similar to an attachment order to an employer for an employees debt.) In some jurisdictions, though, single member LLCs, unlike multimember LLCs, do not restrict creditors of the member to these kind of actions against the member's financial interest in the LLC, and allow the member's creditors to seek direct payment from the LLC as if it owed the debt. (Also, in some states, charging orders aren't the exclusive remedy for members debts against multimember LLCs, either, which one reason you need to know the law of the jurisdiction you plan to operate in.)

dragonwriter 12y ago

Generally, charging orders can be issued against any LLC for a member's debts (all a charging order does is require that the LLC pay any distributions that would go to the member to the creditor instead; a charging order to an LLC for a members debt is similar to an attachment order to an employer for an employees debt.) In some jurisdictions, though, single member LLCs, unlike multimember LLCs, do not restrict creditors of the member to these kind of actions against the member's financial interest in the LLC, and allow the member's creditors to seek direct payment from the LLC as if it owed the debt. (Also, in some states, charging orders aren't the exclusive remedy for members debts against multimember LLCs, either, which one reason you need to know the law of the jurisdiction you plan to operate in.)