New Ohio Law on LLC Asset Protection Benefits

NEW OHIO LAW ON LLC ASSET PROTECTION BENEFITS 5/15/12

The Ohio legislature passed amendments to the limited liability statute effective May 4, 2012 that solidifies the asset protection benefits of a limited liability company. Under the new law if a creditor wins a judgment against an owner of an interest in an LLC the following is now clear:

  • A charging order is the sole and exclusive remedy of a judgment creditor of a member of the LLC. (A charging order means that the creditor would receive any distributions that the debtor member would receive, but does not allow the judgment creditor to mandate distributions from the LLC)
  • The creditor does not have any right to obtain possession of LLC property.
  • The LLC or a member may at any time pay off the judgment creditor and succeed to the rights of the member.

What does this mean to you? - Prior to this new law change many attorneys would set up LLCs in a different state such as Delaware which had more certainty in its asset protection benefits. Now with this new law change, Ohio law should be sufficient for most asset protection planning.


If you have any questions or comments about this article, please contact Michael L. Solomon, Esq., msolomon@budsolo.com or through the website.

This article is intended to provide general and practical information to assist the public in understanding legal issues. Legal advice should only be given when the lawyer and client have an opportunity to explore fully the factual circumstances related to the client's situation and the legal options, as explained by the lawyer to the client.