Is my CPA correct?

Is my CPA correct?

I have a single member LLC in FL.

I was discussing with my CPA how to make sure I have the LLC protection and whether I should make my LLC a 2 member LLC (Husband and wife) based on the following I read on the internet:

Unfortunately, a 2010 Florida Supreme Court case (Olmstead v. Federal Trade Commission) found that the charging order limitation did not apply to single-member LLCs in Florida. This means that any Florida single-member LLC is not treated by the court system like other LLCs, but instead like a sole proprietorship.

However, based on his comments below, it appears that even a 2 member (H+W) LLC is not safe and not given the LLC protection.

If you are the only owner (or with your spouse) and do not have other shareholder or partners, there is no LLC or corporation that will keep an attorney from suing you personally, as an officer, and as a director in addition to suing the entity.

So how does a 2 member - Husband and wife LLC get the LLC protection?

Reply to
natasha
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The answer to your question is a matter of FL state law. The only person who can provide a reliable answer is a FL attorney.

Ira Smilovitz, EA

Reply to
ira smilovitz

Don't ask a CPA about whether your LLC gives you protection from creditors. It's not his job and he likely doesn't know the answer.

Instead, as Ira suggested, you need to talk to a Florida lawyer familiar with insolvency issues.

I read the Olmstead case. It's much more complex than you present. But the basic ruling had to do with whether a judgment creditor could execute on an LLC member's interest in the LLC. The answer is yes, just like any other asset, a creditor can seize your interest in an LLC.

But can the creditor seek to execute on the member's assets other than the LLC? The answer to that is, generally, no. This case does not change that rule. The final sentence in the court's order is,

"we hold that a court may order a judgment debtor to surrender all right, title, and interest in the debtor's single-member LLC to satisfy an outstanding judgment."

No, that is not what the decision says.

Reply to
Stuart O. Bronstein

I think there are two types of "LLC protection". One is shielding the members from liabilities of the LLC, just as a corporation shields its shareholders from liabilities of the corporation. I believe this stands, even as to single member LLCs.

The other is whether the LLC "shares" can be taken in satisfaction of a member's debts. This is a good explanation:

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Reply to
Taxed and Spent

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