Bill > SB319

This bill amends the Uniform Limited Liability Company Act to clarify the provisions surrounding charging orders, which are legal mechanisms allowing judgment creditors to collect money owed by a limited liability company (LLC) member. The bill modifies how charging orders work by establishing that a charging order creates a lien on a judgment debtor's membership interest and limits the creditor's remedies. Specifically, the bill restricts creditors from foreclosing on the charging order lien and clarifies that the only remedy available is to receive distributions that the judgment debtor would have received. The legislation applies to both single-member and multiple-member LLCs and ensures that creditors cannot directly take possession of LLC property or exercise broader legal remedies against the company. The bill also preserves existing exemptions for LLC members and maintains that a charging order is the exclusive method for a judgment creditor to satisfy a judgment from a member's interest in an LLC. Additionally, the amendment protects existing security agreements and does not invalidate prior written agreements between members and creditors, as long as those agreements were executed without violating the LLC's organizational documents.

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https://arkleg.state.ar.us/Bills/Detail?id=sb319&ddBienniumSession=2025%2F2025R