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The LIMITS of LIMITED LIABILITY  Form

The LIMITS of LIMITED LIABILITY Form

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Instructions and help about THE LIMITS OF LIMITED LIABILITY

One of the many advantages of owning a limited liability company, or a LLC, is it limits the exposure to the members of the LLC. If one of the members gets a judgement against him because they're having financial trouble and not able to pay their bills, then the creditor that takes the judgement against him, can only establish a charging lien against the membership interest of that member. What that means is if the entity makes any distributions whatsoever, then all that creditor gets is the distributions made by the LLC. What usually happens is that the members decide not to make any distributions so the creditor gets nothing. The benefit to the other members is it cannot affect the corporation and it cannot affect the other members.

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