Re: 100% Owner of a Corp & Single Member LLCs

Posted by Judgmental (12.228.105.154) on January 18, 2004 at 01:12:09:

In Reply to: Re: question for PARRY posted by billy billy on January 16, 2004 at 18:47:16:

I have to go with WhyChat on this one.

If you own shares in a corporation, your interest in the corporation (your shares) are personal assets to you. Personal assets are seizable. If your creditor seizes your interest in a corporation, your creditor inherits your "voting" rights in the corporation.

With that being said, if you own 100% of the shares in a given corporation, it is possible for your creditors to seize the underlying assets of your corporation because they would have no other shareholders to vote and oppose their action.

The same is true for Single Member LLCs. There was a case (the link is provided below) where a woman created an LLC believing it would protect her assets, but failed to realize that since she was the only member, she owned 100% of the interest and that interest was a personal asset that was seizable indeed.

Being the Prevention Advocate I am, I came across this tidbit when researching my own asset protection options.

This info is good to know, at the very least.

A fairly good description of what can happen with a corporation is available here:

(http://www.trainotti.com/articles/1313.html)

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