Operating Agreement for NM LLCs
JJ Luna Responds:
July 3, 2012 -- My attorney just saw this and had the following to add:
Your answer of "yes" was the basically correct. But, he is not really asking a privacy question: He's talking about asset protection and that is very different. I think he's asking a different question. He's asking:
"If I want an LLC to function as asset protection against creditors of a member of an LLC, do I need an operating agreement that spells out limitations of the partners?"
I'm not in a position to do research on this, but here's my take: The ongoing issue is whether the creditor of one member of an LLC can force the sale of assets in the LLC to satisfy a judgment debt. The answer can be YES and it can be NO and it depends on how the LLC is organized, where it is organized, where it is sued, how it is operated and what the operating agreement says. This is a complex area of law and requires an analysis of each transaction.
Privacy on the other hand is straight forward: if you have multiple members you must file a partnership return and issue K-1s unless there is only 2 members who are a married couple living in a community property state that allows married couples to have disregarded entity "partnership" LLC. (The IRS allows it if the state allows it).