Service of Petition for Charging Order Upon LLC

Service of Petition for Charging Order Upon LLC

      In a recent decision from a federal district court in Georgia, it was held that, under the Georgia LLC Act, a petition for a charging order need not be served on the LLC itself. First Southwestern Financial Services, LLC v. Dennis Waters Construction, LLC, Civil Action No.: 4:13-CV-260, 2019 WL 1782123 (S.D. Ga. April 23, 2019).

      In this instance, First Southwestern sought a charging order against the interest of Dennis Waters in numerous LLCs. Although it is not entirely clear as to why the question arose (the defendant never responded to the request for a charging order), the court considered whether it was necessary to serve the application for the charging order upon the subject LLC. Comparing the Georgia LLC Act’s charging order statute (O.C.G.A. § 14-11-504) to those of other states including with the equivalent provision of the Kentucky Uniform Partnership Act (Ky. Rev. Stat. Ann. § 362.481), in the absence of a provision in the Georgia statute requiring that service of the charging order be made as well upon the LLC, as well as a limited rights afforded one to whom a charging order is granted, it was held the service on the LLC is not required.