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BUSINESS LAW

Whether buying, selling, or forming a business, we’ve got the experience in Utah Business Law. We’re here to help you through the complexities and the necessary steps that need to be taken throughout the process with our business law experience. Setting up a business correctly depends on the purpose of your business and the goals you would like to achieve. We focus on your business, understand your strategy, and get you set up right the first time.

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Why business law is important. Having the right business entity set up is very important.  The type of business entity you pick and the state you set up that business in can be critical.  Here is an example of the legal differences between two states with the same legal idea and how they handle it differently:

Charging order Choice A.

(1)

On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. Except as otherwise provided in Subsection (6), a charging order constitutes a lien on a judgment debtor’s transferable interest and, after the limited liability company has been served with the charging order, requires the limited liability company to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor.

 

(2)

To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under Subsection (1), the court may:

(a) appoint a receiver of the distributions subject to the charging order. A receiver with the power to make all inquiries the judgment debtor might have made; and

 

(b) make all other orders necessary to give effect to the charging order.

 

(3)

Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time. The court may foreclose the lien and order the sale of the transferable interest. Except as otherwise provided in Subsection (6), the purchaser at the foreclosure sale only obtains the transferable interest. They do not thereby become a member, and is subject to Section 48-3a-502.

 

(4)

At any time before foreclosure under Subsection (3), the member or transferee is subject to a charging order under Subsection (1). IT may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.

 

(5)

At any time before foreclosure under Subsection (3), a limited liability company or one or more members whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.

 

(6)

If a court orders foreclosure of a charging order lien against the sole member of a limited liability company:

(a) the court shall confirm the sale;

 

(b) the purchaser at the sale obtains the member’s entire interest, not only the member’s transferable interest;

 

(c) the purchaser thereby becomes a member; and

 

(d) the person whose interest was subject to the foreclosed charging order is dissociated as a member.

 

(7)

This chapter does not deprive any member or transferee of the benefit of any exemption laws applicable to the transferable interest of the member or transferee.

 

(8)

This section provides the exclusive remedy by which a person seeking to enforce a judgment against a member or transferee may, in the capacity of judgment creditor, satisfy the judgment from the judgment debtor’s transferable interest.

Charging order Choice B.

(a) On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order requires the limited liability company to pay over to the person to which the charging order was issued any distribution that would otherwise be paid to the judgment debtor.

(b) Reserved.
(c) Reserved.

(d) The member or transferee whose transferable interest is subject to a charging order under subsection (a) of this section may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.

(e) A limited liability company or one (1) or more members whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.

(f) This article does not deprive any member or transferee of the benefit of any exemption laws applicable to the member’s or transferee’s transferable interest.

(g) This section provides the exclusive remedy by which a person seeking to enforce a judgment against a judgment debtor. Including any judgment debtor who may be the sole member, dissociated member or transferee, may, in the capacity of the judgment creditor, satisfy the judgment from the judgment debtor’s transferable interest or from the assets of the limited liability company. Other remedies, including foreclosure on the judgment debtor’s limited liability interest. As well as a court order for directions, accounts and inquiries that the judgment debtor might have made are not available to the judgment creditor. In attempt to satisfy a judgment out of the judgment debtor’s interest in the limited liability company and may not be ordered by the court.

 

Which would you pick?  This is just one example of how our risk bases approach to entity choice may differ from other business lawyers. Contact us if you have any questions about business law.

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