QUESTION

If i am a member of a LLC and another member has creditors coming after can it come after me and the LLC

Asked on Apr 25th, 2013 on Business Law - Illinois
More details to this question:
If i am a member of a LLC and another member has creditors coming after can it come after me and the LLC
Report Abuse

1 ANSWER

Estate Planning Attorney serving Batavia, IL at Drendel & Jansons Law Group
Update Your Profile
Like many things, it depends. There are certain obligations that arise in the context of doing business that cannot be avoided by individuals, even when the business is formed as an LLC. Generally, however you are insulated from the liabilities of the business and cannot be held liable for them individually simply because you are a member of the LLC. If I am interpreting your question right, these are not liabilities of the LLC; they are liabilities of the other member - personal liabilities of his. If that is the case, your membership interest is safe. Your business is also safe. The most that the other member's creditors could do is to get a judgment against him and obtain a charging order against his membership interest. A charging order only gives his creditors the right to receive his portion of any distributions that are paid; it does not give them any control of the LLC, including the control to determine whether or when or in what amount distributions are to be made. Most people pay out salaries/wages for themselves as employees, rather than making distributions of profits. Even if you decide to make a distribution, the other member's creditor would not have any rights in your share of the distribution.
Answered on Apr 26th, 2013 at 5:35 PM

Report Abuse

Ask a Lawyer

Consumers can use this platform to pose legal questions to real lawyers and receive free insights.

Participating legal professionals get the opportunity to speak directly with people who may need their services, as well as enhance their standing in the Lawyers.com community.

0 out of 150 characters