LLC Asset Protection
HOW TO PROTECT AN LLC FROM ITS MEMBERS:
Many people form LLCs for asset protection. The biggest misunderstanding is that this just protects everything. Yes, if you do business under an LLC, the people you do business with should have to deal with the LLC, not your personally. They will try to pierce the corporate veil. But if you have kept your LLC operating separately, you should be okay.
A big problem is who is protecting the LLC from the members? You (the members,) are the ones out there driving around each day, causing accidents, having personal debt and credit cards, and getting divorces. So you have a LLC that has assets in it, and you have personal problems, in most states, the court can get to your membership interests and you can lose everything. Especially when you have multiple members involved, there’s a lot of liability you members take on. The hope is that even if you personally get into trouble, your LLC can keep on existing as if nothing happened.
So the biggest problem in LLC asset protection is that most states don’t protect the LLC from the members.
The Wyoming Closed LLC is the industry leader in attempting to protect the LLC from the members. Right now, Wyoming has the best laws for this. In Wyoming the “Exclusive remedy” is a charging order of the members’ interest. But this does not give the creditor the ability to dissolve, run, or demand a distribution of profits. Thus keeping the members ability to keep the LLC up and running as well as the assets staying put in the LLC. The fact that Wyoming puts the words “Exclusive” in its laws is what separates the Wyoming LLC from other popular States like Nevada, Delaware, New Mexico, and Florida. Wyoming also gives closely held LLCs such as a single member LLC a lot of the rights as a multi member LLC or an LP, LLP, or LLLP.
How can Northwest help me protect my LLC assets:
- We will form your LLC for you in any state for $100. That includes everything you need.
- We will act as your registered agent service for $125 a year.
- If you choose Wyoming, we will be your Wyoming Registered Agent.
- We send you annual report reminders and can file your reports for you.
- We will be your door to the world and guard your data.
We recommend a Wyoming LLC.
Should I hire an attorney?
Absolutely. We highly recommend you work with your local attorney for whatever you do. We can work with your local attorney as well if you’d like to run everything through them. We help attorneys manage hundreds of their clients LLCs and corporations.
We recommend you print out the page you’re on along with these:
and bring them in to your attorney and have a conversation about what LLC asset protection might look like for you locally. What forming an LLC for asset protection means for you locally is very important. These pages are meant as a starting point to have a conversation with your local CPA and attorney.
What if I just want to do it myself?
You can easily file an LLC yourself. Here’s how you can form a Wyoming LLC yourself. You simply just need hire hire us as your registered agent.
We have the forms to every state in your online account you’ll need to form your LLC and there are all kinds of maintenance forms that you’ll need like membership certificates, operating agreements, capital contributions, and a bill of sale all in your online account to make forming and maintaining your LLC as simple as possible.
How asset protection works:
Something great about the Wyoming LLC for asset protection is the default laws. The default laws without an over complex LLC operating agreement offer great protection. The principle around using an LLC to transact business is that if you choose the best place to form an LLC like Wyoming or Delaware, that the LLC will have more protections, protecting you from what the LLC does. Wyoming takes the LLC a little further and tries to protect the members from each other and protecting the LLC from what the members might do personally.