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The state a person lives in, and where they established their limited liability company (LLC) may cause them to lose more in a lawsuit than someone in a neighboring state only because of differences in jurisdictional law. But Garrett Sutton — best-selling author, corporate attorney, and founder of Corporate Direct and Sutton Law Center – has found an overlooked legal code that can bestow the strength of Wyoming LLC law to entrepreneurs and investors no matter where they are in the United States, if they follow the right process.“It’s never seemed right that business owners and investors established in states with weak asset protection, like California, should be so much more vulnerable to losing everything in lawsuits than their counterparts in states with strong asset protection, like Wyoming,” Garrett Sutton said. “I was delighted to make this discovery that should enable LLC owners to sleep easier at night.”
What most entrepreneurs don’t realize is that their protection level is affected by where the entity is formed, and where they live. If the LLC owner lives in a state with weak protection, such as California, then those weaker laws apply during a lawsuit. Even if the entity is formed in a state with strong protection laws like Wyoming.
How’s that possible? Your membership interest in an LLC is considered a security. According to Uniform Commercial Code (UCC) Article 8—the law in all 50 states—there are two types of securities:
1. Certificated securities
2. Uncertificated securities
Certificated securities are represented by a properly prepared and held certificate, like a stock certificate. Uncertificated securities aren’t as formal, or protected. See, UCC 8-102(4), (18).
The trouble, is most membership interests in an LLC are usually represented by an uncertificated security.
What does this mean? Many state laws see these uncertificated securities as the owner's personal property. This means the owner's membership interest of an LLC “lives” where the owner lives and is subject to that jurisdiction’s laws.
Corporate Direct developed a method for certificating LLC securities in Wyoming to be governed by UCC Article 8 so that Wyoming law applies. It’s called Armor8.
Here’s how it works:
1. Corporate Direct turns the LLC membership interest into a certificated security.
2. The membership certificates are held in a safe deposit box at a Wyoming bank.
The second step is critical. Because when Corporate Direct physically holds the certificated securities in Wyoming, the membership interest is now governed by Wyoming law! Learn more about it here.
Armor8 adds a greater layer of protection. When protected by Armor8, a judgment creditor can only seize your LLC membership interest by hiring a Wyoming attorney to get a Wyoming court order to reach the certificates. For many, that’s a substantial deterrent to take further action.
Armor8 turns the tables by wisely using Article 8 to your advantage. By doing so, your Wyoming LLC remains protected—no matter where the LLC owner lives. Additional information is available at https://www.corporatedirect.com/asset-protection/safe-deposit-security-wyoming-llcs/.
About Garrett Sutton:
Why haven’t other people seen this loophole? Garrett Sutton, Esq., Corporate Direct’s Founder and a Rich Dad Advisor, spent the last 35 years protecting entrepreneurs and real estate investors. It’s his passion and specialty. Because of his diligence and desire to offer the most rock-solid protection available, he uncovered the hidden loophole in Article 8.
Contact Info:
Name: Tamika Holmes
Email: Send Email
Organization: Corporate Direct
Address: 348 Mill Street, Reno, NV 89501
Phone: 1-775-824-0300
Website: https://www.corporatedirect.com/ultimate-wyoming-llc-protection/
Release ID: 242037
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