Charging Order Protection
A statutory rule limiting a creditor's remedy against an LLC member to a charging order — the right to receive distributions, not to seize the membership interest.
A charging order is a court order that directs an LLC to pay a member's creditor whatever distributions would otherwise go to that member. In "sole remedy" states, including Wyoming, the charging order is the only remedy a personal creditor can pursue against an LLC interest — the creditor cannot force a sale of the membership, vote the interest, or dissolve the LLC. This is the statutory engine behind Wyoming asset protection, and it applies even to single-member LLCs (a critical difference from many other states).
Also known asSole Remedy Statute, Charging Order
Related terms
- Wyoming LLC — An LLC formed under Wyoming's LLC Act, the first LLC statute in U.S. history (1977) and widely considered the …
- Wyoming Asset Protection — The combination of charging-order protection, member privacy, and statute-of-limitations rules that make Wyomi…
- Single-Member LLC — An LLC with only one owner, taxed by default as a disregarded entity (sole proprietorship for tax purposes).…