Posted by BTI on April 15, 2009 at 10:13:40:
M/C
The ruling came out of a Colorado Bankruptcy court case and is even more important because it is at the federal level. The ruling basically stated a single member LLC is simply a “alter ego” and it allowed the creditors to go right through the LLC as though it didn’t exist.
A good example of a multi-member LLC is in the O.J.Simpson case. The Brown family has been unable to get a penny out of it, because it is a multi-member LLC, and the operating agreement has been properly written to cover the issue.
I now have my sister as a member in any new LLC’s as a 1/10 of 1% member, simply because of the issue that a married couple may be ruled as a single member of the LLC possibility.
Or, after 49 years together we could get divorced and eliminate that as a possibility. No, we will stick with my sister as a member for now, but maybe we can review the situation in 11 years.
BTI