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RSA 304-C:126 · Charging Orders

Title
XXVIII: PARTNERSHIPS
Chapter
304-C · LIMITED LIABILITY COMPANIES
Status
current
Official source linked
Yes
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304-C:126 Charging Orders. –

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I.

On application to a court of competent jurisdiction by any judgment creditor of (a) a member of a limited liability company (the "debtor-member") or (b) a transferee of all or any part of a member's limited liability company interest (a "transferee"), the court may enter a charging order against the limited liability company in respect of the limited liability company interest of the debtor-member or the transferee for the unsatisfied amount of the judgment plus interest.

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II.

(a) A charging order constitutes a lien on a debtor-member's or transferee's limited liability company interest.

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(b)

Under a charging order, a judgment creditor has only the right to receive distributions to which the debtor-member or transferee would otherwise have been entitled from the limited liability company, and only to the extent of the judgment, including interest.

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(c)

A judgment debtor that obtains a charging order does not thereby become the holder of the debtor-member's or transferee's limited liability company interest.

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III.

This section does not deprive any judgment debtor of the benefit of any exemption law applicable to the judgment debtor's membership rights.

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IV.

Except as provided in paragraphs VI and VII, a charging order is the sole and exclusive remedy by which a judgment creditor of a debtor-member may satisfy a judgment from a debtor-member's membership rights or from the assets of a limited liability company. This section is not exclusive as to the rights of creditors with respect to the limited liability company interests of transferees.

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V.

(a) The remedy of execution upon a debtor-member's membership rights shall be unavailable to a judgment creditor attempting to satisfy a judgment against a debtor-member of a multi-member limited liability company.

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(b)

Except as provided in paragraph VI, the remedy of execution upon a debtor-member's membership rights shall be unavailable to a judgment creditor attempting to satisfy a judgment against a debtor-member of a single-member limited liability company.

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VI.

(a) If a judgment creditor shows to the satisfaction of a court of competent jurisdiction that distributions under a charging order in respect of the limited liability company interest of a debtor-member of a single-member limited liability company will not satisfy the judgment within a reasonable time, a charging order shall not be the sole and exclusive remedy by which the judgment creditor may satisfy the judgment against the member.

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(b)

Upon such a showing, the court may order the sale of the debtor-member's membership rights under an execution sale.

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(c)

A judgment creditor may make a showing to the court under subparagraph (a) that distributions under a charging order will not satisfy a judgment either (1) when the judgment creditor applies for the entry of a charging order under a member of a single-member limited liability company or (2) at any time thereafter.

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VII.

If, under paragraph VI, a court orders an execution sale of the membership rights of a debtor-member that is the member of a single-member limited liability company:

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(a)

The purchaser shall obtain all of the member's membership rights and not merely the rights of an transferee;

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(b)

The purchaser shall become the member of the limited liability company; and

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(c)

The debtor-member whose membership rights have been sold shall cease to be a member.

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VIII.

Nothing in this section shall limit:

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(a)

The rights of a creditor that has been granted a consensual security interest in the limited liability company interest or other membership rights of a member to pursue the remedies available to the secured creditor under other law applicable to secured creditors;

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(b)

The principles of law and equity which affect fraudulent transfers;

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(c)

The availability of the equitable principles of veil-piercing, equitable lien, or constructive trust, or other equitable principles not inconsistent with this section; or

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(d)

The continuing jurisdiction of the court to enforce its charging order in a manner consistent with this section.

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IX.

In any action in a court of this state in which a judgment creditor seeks a charging order against a member or transferee of a foreign limited liability company, this section shall apply. Source. 2012, 232:2, eff. Jan. 1, 2013. Limited Liability Company Dissolutions

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Source note

Source. 2012, 232:2, eff. Jan. 1, 2013. Limited Liability Company Dissolutions

Source history

  • 2012, 232:2, eff. Jan. 1, 2013. Limited Liability Company Dissolutions

Related materials

Bill relationships

  • 2026 HB186 reference

    rganized under RSA 293-A or a limited liability company organized under to RSA 304-C, and may merge with a domestic business corporation organized under RSA 293-A or a limited liability company organized under RSA 304-C. 32 New Subparagraph; New Hampshire Business Corporation Act; Domestication and Conversion; Entity Conversion Authorized. ?Amend RSA 293-A:9.50 by inserting after paragraph (f) the following new subparagraph:

  • 2026 HB186-FN-A reference

    :1, I to read as follows: I. "Alternative treatment center" means a domestic business corporation organized under RSA 293-A, a domestic limited liability company organized under RSA 304-C, or a not-for-profit [entity] voluntary corporation organized under RSA 292 that is registered under RSA 126-X:7 and that acquires, possesses, cultivates, manufactures, delivers, transfers, transports, sells, supplies,

  • 2026 HB54 reference

    rganized under RSA 293-A or a limited liability company organized under to RSA 304-C, and may merge with a domestic business corporation organized under RSA 293-A or a limited liability company organized under RSA 304-C. 6 New SubParagraph; New Hampshire Business Corporation Act; Domestication and Conversion; Entity Conversion Authorized. ?Amend RSA 293-A:9.50 by inserting after paragraph (f) the following new subparagraph: (

  • 2026 HB54-FN reference

    X:1, I to read as follows: I. "Alternative treatment center" means a domestic business corporation organized under RSA 293-A, a domestic limited liability company organized under RSA 304-C, or a not-for-profit [entity] voluntary corporation organized under RSA 292 that is registered under RSA 126-X:7 and that acquires, possesses, cultivates, manufactures, delivers, transfers, transports, sells, supplies,

  • 2026 SB479 reference

    X:1, I to read as follows: I. "Alternative treatment center" means a domestic business corporation organized under RSA 293-A, a domestic limited liability company organized under RSA 304-C, or a not-for-profit [entity] voluntary corporation organized under RSA 292 that is registered under RSA 126-X:7 and that acquires, possesses, cultivates, manufactures, delivers, transfers, transports, sells, supplies,

  • 2026 SB479-FN reference

    X:1, I to read as follows: I. "Alternative treatment center" means a domestic business corporation organized under RSA 293-A, a domestic limited liability company organized under RSA 304-C, or a not-for-profit [entity] voluntary corporation organized under RSA 292 that is registered under RSA 126-X:7 and that acquires, possesses, cultivates, manufactures, delivers, transfers, transports, sells, supplies,

  • 2026 SB644 reference

    oreign partnership or such partners as set forth in title XXVIII. (E) “Member” means a person who has been admitted to a limited liability company as a member in accordance with RSA 304-C or in accordance with the laws of the state or foreign country or jurisdiction under which the limited liability company is organized. "Member" includes each member of a limited liability company, foreign limited liabi

  • 2026 SB644-FN reference

    oreign partnership or such partners as set forth in title XXVIII. (E) “Member” means a person who has been admitted to a limited liability company as a member in accordance with RSA 304-C or in accordance with the laws of the state or foreign country or jurisdiction under which the limited liability company is organized. "Member" includes each member of a limited liability company, foreign limited liabi

  • 2026 SB651 reference

    , I to read as follows: I. "Alternative treatment center" means a domestic business corporation organized under RSA 293-A, a domestic limited liability company organized under RSA 304-C, or a not-for-profit [entity] voluntary corporation organized under RSA 292 that is registered under RSA 126-X:7 that acquires, possesses, cultivates, manufactures, delivers, transfers, transports, sells, supplies, and

  • 2026 SB651-FN-A reference

    , I to read as follows: I. "Alternative treatment center" means a domestic business corporation organized under RSA 293-A, a domestic limited liability company organized under RSA 304-C, or a not-for-profit [entity] voluntary corporation organized under RSA 292 that is registered under RSA 126-X:7 that acquires, possesses, cultivates, manufactures, delivers, transfers, transports, sells, supplies, and