Posted by JHyre in Ohio on August 02, 2003 at 06:58:28:
The judgment would not attach to the C-corp or its assets. Instead, the judgment creditor would seize the presidents shares in GM, plain and simple. That means that the creditor would own the shares owned by the president, presumably not the whole company in the case of GM. With a closely-held company, the results would be far more profound for the company as a whole. Some states common law doctrine may limit the ability to seize corporate shares in closely-held companies IF there are other bona fide shareholders…that’s dicey protection at best.
In re LP vs. LLC - I don’t see much of a difference between the control exercised by a GP in an LP or the Manager in an LLC…in both instances, the management control is near absolute. In the case of a very large organization (i.e. - not the small outfits contemplated by most people on these fora), I might lean towards LP due to the precedent that there has never been a sucessful hostile takeover of an LP (of which I’m aware). Otherwise, I default to LLC as a “pass through” choice for holding property because it’s cheaper than an LP and doesn’t have the liability issues that LPs face in some states (limitations on what Limited Partners can do without losing the “Limited” part of the title…the RULPA addresses this issue to a large degree, while the old Uniform Limited Partnership Act really does not).