Petition for Better Protection of LLC Companies Against Private Creditors
The Goal. To limit what private collectors can and can do to LLC companies in order to collect money owed to them.
The Problem. The beauty of LLC companies is that your personal assets are protected from your business creditors, but when it comes to your personal debts, your creditors may go after your shares of the company by getting a charging order. Charging orders provide excellent protection to other members of the LLC because it prevents your creditors from taking part of the company management, unfortunately, only a few states consider charging order as an exclusive remedy to collect debt. In other states, creditors can request for a charging order, as well as the right to foreclose your shares of the company, or dissolve the company altogether.
The Solution. The federal government should mandate for charging order to be an exclusive remedy to collect debt from LLC companies all across the country. While charging order is allowed in all states, it’s useless if creditors are allowed to foreclose the shares of an LLC member or dissolve the company that others have also worked hard for to build. Other states should follow in the steps of Texas, Arizona, and Wyoming, and make charging order a sole remedy for debt collection from an LLC.
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