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Do other entities limit creditors to a charging order?

Because proper planning turns the charging order from a creditor remedy to a shield against creditors, any entity to which a charging order may apply is called a 'Charging Order Protected Entity' or COPE. COPES include; limited partnerships; limited liability partnerships; limited liability limited partnerships; or limited liability companies (in some jurisdictions, only multi-member LLCs have charging order protection).

Corporations are not COPES. As we have previously said, if a corporate shareholder comes under creditor attack, that creditor may seize his shares of stock for the amount of the outstanding debt. If the shares seized exceed 50 percent of the company's voting shares, the creditor could then vote to liquidate the company, and seize his share of the company assets upon liquidation. You can see why the vulnerability of corporate shares to creditor attachment makes the corporation a relatively poor protective vehicle for personal assets. This inability to seize COPE interests is what makes these entities so desirable for creditor protection.

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The Presser Law Firm, P.A. - Asset Protection Attorney
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