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By: Ted Sutton, Esq. In the business realm, Texas has become the lone star that is burning brighter. And it may become a top state for business in the near future. They say that everything’s larger in Texas. This also includes a larger demand to form a...
By: Ted Sutton, Esq. Over the last few years, the use of blockchain technology has exploded onto the scene. DAOs have grown in popularity alongside it. So, what exactly is a DAO? A DAO is a new entity form that stands for Decentralized Autonomous Organization....
By: Ted Sutton, Esq. Intro Many people have used AI to generate new artworks. A few of them can generate an image. And as we saw with the artificial hit “Heart on My Sleeve” meant to sound like Drake and The Weeknd, AI can also generate new songs. But if you make...
The Supreme Court of Florida took away a key asset protection benefit in deciding Olmstead v. Federal Trade Commission (SC 01-109, Fla. June 24, 2010). Before the ruling a charging order was the exclusive remedy, whereby the judgment creditor (the person who won a lawsuit) could only receive distributions from the LLC. Now, a judgment creditor may directly seize the ownership interest of a member in a single member LLC.
The Olmstead decision allows Florida courts to order a judgment debtor to surrender all right, title and interest in the debtor’s single member Florida LLC to satisfy a judgment. Prior to the ruling many had believed that Florida law provided that the charging order was the exclusive creditor remedy.
Not anymore.
Multi-member Florida LLC owners should be very concerned by this decision. Writing a dissent in the 3-2 decision Justice Lewis warned that the Olmstead ruling means that the charging order is a non exclusive remedy for all LLCs, whether single or multi member.
Justice Lewis wrote:
“The majority opinion now eliminates the charging order remedy for multi-member LLCs under its theory of “nonexclusivity” which is a disaster for those entities.”
If you are using a Florida LLC to protect your assets you may want to reconsider your state of formation.
Wyoming allows LLCs to easily reform themselves into Wyoming. The continuance process allows a Florida LLC to reorganize in Wyoming and keep the same formation date, EIN number and credit history. The advantage is that you now have a Wyoming LLC, which expressly recognizes the charging order as the exclusive remedy.
Our office charges $995* plus filing fees to continue LLCs to the better asset protection state of Wyoming. Please call 1-800-600-1760 for more information.
And remember, asset protection is an ever changing area of the law. The Olmstead case was decided in a way that allowed another government agency – The Federal Trade Commission – to collect. Of course, the case now applies to the benefit of all creditors. In a dynamic field it is important to stay current on the latest cases, and move accordingly.
*Fees are subject to change. Please obtain a quote from an Incorporating Specialist for up-to-date fees.
By: Ted Sutton, Esq. In the business realm, Texas has become the lone star that is burning brighter. And it may become a top state for business in the near future. They say that everything’s larger in Texas. This also includes a larger demand to form a...
By: Ted Sutton, Esq. Over the last few years, the use of blockchain technology has exploded onto the scene. DAOs have grown in popularity alongside it. So, what exactly is a DAO? A DAO is a new entity form that stands for Decentralized Autonomous Organization....