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Can a collection agency in New York State garnish or place a hold/freeze on a Limited Liability Corporation account if the name of the person they are after appears on the account as well?
In other words, if 'John Doe' has defaulted on a huge loan and 'John Doe' owns 'Doogy Shampoo LLC', can the lawyers persueing payment from 'John' freeze the LLC account that his name is attached to? Or is the LLC account protected?
I'm not sure I agree. It think it depends on how John Doe is listed on the account. If he is listed only as an authorized signator, meaning they can authorize withdrawals, then probably not. However, if he is listed as a Joint Tenant, they probably can.
Limited Liability: Owners of a LLC have the liability protection of a corporation. A LLC exists as a separate entity much like a corporation. Members cannot be held personally liable for debts unless they have signed a personal guarantee.
Limited Liability: Owners of a LLC have the liability protection of a corporation. A LLC exists as a separate entity much like a corporation. Members cannot be held personally liable for debts unless they have signed a personal guarantee.
Yes that is true. But I gather that's not the case here. It would appear the debt is a personal one and the OP is concerned about corporate assets being attached. So the issue is how the account was setup. While it would be unusual and definitely not smart for an individual to sign up as a joint tenant on a corporate account, it could be done and it could make the account attachable.
I was the one who opened the account for this LLC and I'm worried that because my name appears as the one who opened it (and whose name appears on the next line after the store's name on the credit card) that I might have shot myself in the foot.:-(
Placing assets within a business entity (i.e., limited liability company (LLC), corporation or partnership) is sometimes touted as an asset protection device, with respect to personal debts. While this strategy has considerable merit, it is misleading because, when used by itself, it dangerously and unnecessarily exposes these assets to a high risk of loss to the business's creditors.
In order to understand how protection of your business from personal debts is possible, you need to understand something called a "charging order," and how it affects limited partnerships (LPs), general partnerships, limited liability partnerships (LLPs), sole proprietorships, corporations and limited liability companies.
The charging order concept stems from a theory involving partnership property. For example, a partner in a general or limited partnership incurs a large personal debt from activities outside the partnership. Further, this debt cannot be satisfied from the partner's personal assets outside the partnership.
According to this view, the personal creditor of the partner can obtain what is termed a "charging order" against the partner's interest in the partnership, and become an "assignee" of this interest. In effect, the creditor attaches the partner's interest in the partnership.
However, according to the law, a partner does not actually own any specific assets in a partnership. His property interest is, in fact, his partnership interest itself, which is deemed a type of personal property. Because of this theory regarding partnership property, a personal creditor of a partner may attach the partner's interest, but the creditor may not directly attach the underlying partnership assets.
both so much!
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