If a money judgment is rendered against a partner or member but not against the partnership or limited liability company, the judgment debtor’s interest in the partnership or limited liability company may be applied toward the satisfaction of the judgment by an order charging the judgment debtor’s interest pursuant to Section 15907.03, 16504, or 17705.03 of the Corporations Code.
Miscellaneous Creditors’ RemediesCharging Orders
Section § 708.310
If someone owes money because of a judgment against them, and they are a partner or member of a company, their share in that company can be used to pay off their debt. This is done through a legal process called a 'charging order' as outlined in specific sections of the Corporations Code.
money judgment partner liability member liability
Section § 708.320
This law explains how to create a lien on a person's interest in a partnership or limited liability company if they owe someone money. To do this, you must serve a notice asking for a charging order to the person who owes money and either all partners or the partnership, or to all members or the LLC. If the court grants the charging order, the lien stays in place according to the order's terms. If the order is denied, the lien disappears.
(a)CA Civil Procedure Code § 708.320(a) A lien on a judgment debtor’s interest in a partnership or limited liability company is created by service of a notice of motion for a charging order on the judgment debtor and on either of the following:
(1)CA Civil Procedure Code § 708.320(a)(1) All partners or the partnership.
(2)CA Civil Procedure Code § 708.320(a)(2) All members or the limited liability company.
(b)CA Civil Procedure Code § 708.320(b) If a charging order is issued, the lien
created pursuant to subdivision (a) continues under the terms of the order. If issuance of the charging order is denied, the lien is extinguished.
charging order lien creation judgment debtor
