On June 16, 2011, Nevada's governor signed a new law specifically making a charging order the exclusive remedy of a judgment creditor against owners of both LLCs and corporations in Nevada. The legislation specifically includes a sole member of an LLC and a sole shareholder of a corporation.
Nevada is clearly working to provide better asset protection for owners of closely held businesses. The new law, which was signed by the governor a few days ago, passed the Nevada senate by a vote of 21-0 and the Nevada Assembly by a vote of 42-0.
Earlier this year, the Florida Supreme Court ruled that under Florida law, creditors of a sole member of an LLC were not limited to pursuing a charging order, but could also pursue other remedies against that debtor. Since that time, a lot of attention has been focused on single member LLCs.
Since the new Nevada statute is only a few days old, commentators are just beginning to offer insights into the new legislation. But the new Nevada statute is a clear reminder that some states provide better protection than others for business owners (particularly single owners). Nevada, like Delaware, is currently a good choice for forming a corporation or a limited liability company from an asset protection standpoint.