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What’s so great About an LLC Anyway? Ask Daniel Kalenov PowerPoint PPT Presentation


Every investor worth their salt knows to protect their assets with a Limited Liability Company (LLC). Chances are, you’ve got one or more LLCs and are leveraging their accompanying tax advantages. You’re also well aware of the liability protection that an LLC provides. Like I said, you’re a smart investor.

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What’s so great About an LLC Anyway? Ask Daniel Kalenov

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What s so great about an llc anyway ask daniel kalenov

What’s so great About an LLC

Anyway? Ask Daniel Kalenov

Every investor worth their salt knows to protect their assets with a Limited Liability

Company (LLC). Chances are, you’ve got one or more LLCs and are leveraging their

accompanying tax advantages. You’re also well aware of the liability protection that an

LLC provides. Like I said, you’re a smart investor.

But here’s something you may not know: LLCs come with Charging Order Protection.

Even in an LLC, members’ assets are still potentially at risk from creditors and

judgments. And let’s face it, successful businesses are claim magnets, especially if you

have outstanding debts or judgments elsewhere.

The key point of Charging Order Protection is to protect your business and its assets

from the debt of any of the LLC members. With it, a creditor of a member of an LLC

cannot put a claim against the assets of the LLC, but can only obtain a charging order

against distributions made to the member under judgment. This protects the assets of

the LLC itself as well as its members.

However, a creditor cannot force the LLC to make a distribution to its members. This

may leave the creditor with nothing from the LLC and gives the member under

judgment a strong negotiating position to settle with the creditor for less than the whole

debt. This last point, however, depends upon the situations of both the creditor and the

member.

Say, for example, that the creditor is another individual that needs the proceeds of the

settlement. She will likely be willing to settle the debt at a discount. On the other hand, if

the creditor is a bank, the bank will likely not need to have the money in hand at any

specific time and so may be less inclined to settle.

But what about the halt in distributions to the member(s) of the LLC? It’s true that a

creditor can’t compel a distribution, but the member(s) may be reliant upon distribution

for financial viability. In that instance, the possibility of discounting the debt will

depend on who needs the money more.

Also, different states enforce the Charging Order with varying levels of vigor, so be sure

to speak with your legal team about domiciling your LLC in the proper jurisdiction.


What s so great about an llc anyway ask daniel kalenov

Either way, the Charging Order is an essential component to protecting your assets and

a key benefit to any properly structured LLC.

Daniel Kalenov led Global Diversified Partners goal is to be the investment firm of

choice for individuals seeking to diversify their portfolios into tangible assets, not just

paper ones. When it comes to your finances, if you don't know where you're going, any

road will get your there. Global Diversified Partners partner with your to re-claim your

decision making, and ultimately your future.

Check out some of the other blogs at www.globaldiversifiedpartners.com/blog for

examples of writing style and topics


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