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Charging Orders for Limited Liability Partnerships

April 13, 2006

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Registering a general partnership as a limited liability partnership (LLP) will not be much help in avoiding a forced liquidation through a charging order because of an owner's personal debt liability.

The LLP is simply a general partnership that registers to achieve limited liability for all of the owners. In all other respects, the LLP is subject to general partnership law (i.e., the Uniform Partnership Act or Revised Uniform Partnership Act) regarding charging orders.

Thus the owner's personal creditors can attach and then foreclose on an LLP interest, and seek a forced liquidation of the business.

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