Some people have been worried that having a single-member LLC puts them at risk.  It is true that the single member LLC and charging order protection has come under attack in a number of states. As I explain in my video (click on the picture to the right), the negative spin started with two court cases, one in Florida and one in Colorado, plus a law passed in Utah.

The Florida case held that creditors of the single member in a single member LLC could go directly against the LLC and take the assets of the LLC. This ruling immediately meant that every single member LLC in Florida no longer qualified for charging order protection. This does not affect the corporate shield protection, which remains in place.

Earlier, a bankruptcy case in Colorado had a similar outcome. The bankruptcy court let the LLC's creditors go directly against the LLC to satisfy their judgment. The charging order was simply set aside because there was only one member.

In the cases that have attacked charging order protection in a single member LLC, the logic has always been that the intent of the charging order was to protect the "other partners." In a single member LLC there isn't any "other partner" or member, so the intent of the charging order protection isn't fulfilled. You have to have a multi member LLC to justify this protection.

Therefore, the two types of court cases that have gone against the charging order concept have involved single member LLCs. Hence there is now a rise in the multi member LLC.   Just remember that a multi member LLC can have secondary partners with small pieces of the business--not peppercorn small, but not fully controlling amounts either.