The operating agreement’s function is to regulate the management and options of the LLC. The truth is that all LLC Operating Agreements are not created equal. Most of them are boiler-plate documents.
In Alaska, the creditor cannot foreclose against your interest in the LLC.
The LLC operating agreements that are optimized for asset protection have the following attributes:
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They support the operating of a manager-managed LLC. An LLC must be manager-managed to retain the charging order protection.
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Most incorporators don’t discuss this because they want the sale immediately, and don’t spend the time to educate the client.
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The LLC operating agreement must work in conjunction with other documents to strengthen the overall plan. The LLC may hold the asset. Alternatively, the LLC may hold the lien against the asset that’s in your name. Here’s an example:
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A promissory note that you sign, on behalf of your company, may encumber those assets to the Alaska LLC.
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Your business (i.e. Wyoming company) assets are stripped of any equity or value through liens held by the Alaska LLC.
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If the Wyoming corporation or Wyoming LLC is attacked by an abusive creditor, the Alaska LLC is paid first to satisfy the lien (creditor) of first priority.
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All other creditors are waiting in line for payment and there may be nothing left. It’s okay to give up an empty corpse.
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Consider using a protector. This is a person who approves the decisions of the manager, can veto the manager, replace the manager and serves as the advocate for the members. This person can be anyone you trust, or your attorney.
The Most Protection Is Afforded By An LLC With The Following Attributes:
This Is Not Legal Advice. Please See A Qualified Tax Advisor Before Engaging In Any Asset Protection, Business Planning Or Estate Planning.
