On Apr. 7, ARK LEG enacted bill on LLC charging orders, judgments.
ARK LEG enacted bill SB 319 related to limited liability company charging orders.
Amends ARK LEG 4-3-38-5-503 relating to charging orders, transferable interests.
Bill Provisions
A court having jurisdiction may charge the membership interest of the judgment debtor with the payment of the unsatisfied amount of the judgment with interest.
If court charges membership interest with payment of judgment, judgment creditor has only right to receive distribution to which debtor would otherwise be entitled to.
Clarifies charging order constitutes a lien on judgment debtor's membership interest, charging order lien shall not be foreclosed on under the subchapter or any other law.
Entry of charging order is exclusive remedy by which judgment creditor of member or owner of membership interest may satisfy judgment out of the debtor's interest.
Shall not be construed to deprive member of LLC or another owner of membership interest in LLC of the benefit of an exemption applicable to the membership interest.
Creditor of member or owner of membership interest does not have right to obtain possession of or exercise legal or equitable remedies with respect to property of LLC.
Section applies to single-member and multiple-member limited liability companies.
Legislative History
On Feb. 26, 2025, bill was introduced in Senate; on Mar. 13, 2025, bill passed Senate.
On Mar. 13, 2025, bill was introduced in House; on Mar. 31, 2025, bill passed House.
On Apr. 7, 2025, bill was signed into law by the governor and assigned Act 461.
Effectiveness
Act effective 91 days after legislature adjourned sine die (May 5), so Aug. 4, 2025.
Regulators
ARK LEG
Entity Types
Corp
Reference
Act 461, Bill SB319, 4/7/2025; Citation: ARK LEG 4-3-38-5-503;
