Sols said:
Under US law, yes.
Attack, yes. Win? Depends on the circumstances. But they don't stand much of a chance against the LLC in its home state, unless you've been doing something criminal (including criminal neglect).
As for how the LLC would be treated in a foreign court is another story. Some courts might seek guidance from US law on how to interpret it. Some might simply apply local law. Europe doesn't have cohesive legal systems across the region
It's possible that a creditor is successful against your LLC in for example a French court. But that doesn't mean much in New Mexico. The creditor can try to have the French judgement enforced in New Mexico but most likely, a court there would throw it out.
There is no difference to the company itself. In the eyes of US law, the company is a Wyoming or New Mexico "citizen" regardless of where its members/managers are based. However, those members/managers are subject to the laws of where they live. If you live in a place that disregards LLCs or tries to go after you personally, it's not always clear what will happen.
Asset protection isn't a a dial knob that you can just turn to make it higher. It's not a "number go up, big number better" thing.
Limitation of liability is strong and protected in US LLCs. In most cases, you don't need to take any further steps. The law is clear. But if you have assets to protect, that's a slightly different story.
LLCs are neither partnerships nor corporations. They are a hybrid. Most legal systems I've come across treat them as corporations for limitation of liability. When it comes to tax, interpretation varies between treating them as transparent (partnerships) or opaque (corporations).
Do you have any examples of jurisdictions that treat LLCs as partnerships for liability purposes (not just tax purposes)?
If a company that becomes insolvent (can't cover its liabilities), the directors are not required to pay out of pocket for the liabilities. Directors' personal liability is quite narrowly defined in most cases and is generally limited to malicious activities, neglect, or other very specific circumstances. Insolvency isn't one, unless that insolvency was caused by malice or neglect. Even then, the liability is narrow.
Let's say a company takes payments from customers to buy a shipment from a supplier. However, the supplier ”” suddenly and with no prior warnings/indications ”” shuts down its factory. This financial hit is more than the company can handle, so it has to declare insolvency. Are you saying it's up to the directors to pay out of pocket? Or would the company simply refund as much as it can and then have it be up to a liquidator to pore over the assets of the company and see what can be sold to pay back creditors?
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