What is a charging order?

A court order that charges a debtor's LLC membership interest with the obligation to pay a judgment debt. Distributions made to the member are redirected to the creditor. The creditor gets no control over the LLC.

Is the charging order the only remedy in Nevis?

Yes. The Nevis LLC Ordinance designates the charging order as the exclusive remedy against a membership interest. Foreclosure, attachment, and other remedies are not available.

Can the creditor force the LLC to make distributions?

No. The charging order redirects distributions if made. The manager decides whether distributions are made. The creditor cannot compel the manager to distribute.

Can the creditor take over the LLC?

No. The charging order gives no management rights, no voting rights, and no ability to remove or replace the manager.

Does the charging order layer work with a Cook Islands trust above?

Yes. A Cook Islands trust above a Nevis LLC creates the same double-layer structure. The trust protects the membership interest at the trust level; the charging order limits the remedy at the LLC level.

Can a US court apply US charging order law to a Nevis LLC?

A US court may attempt to apply US law to a US member's interest. Whether it succeeds in enforcing against the Nevis LLC's assets depends on whether it has jurisdiction over those assets. Assets held in Nevis are generally outside US enforcement reach.

What happens to the charging order if the membership interest is transferred?

The charging order is a lien that attaches to the interest. A transfer of the interest while the order is in effect may be subject to the order. Confirm the mechanics with a Nevis-qualified adviser for any specific transaction.

Nevis LLC Charging Order | Exclusive Remedy Protection

Q: Why is a single-member LLC particularly protective?

Because the manager (typically the settlor) has no incentive to make distributions while the charging order is in effect, and the sole member (the trust) controls whether distributions are ever approved.

What a charging order is

A charging order is a court order that charges the debtor's membership interest in an LLC with the obligation to pay the judgment debt. The effect is that if the LLC makes distributions to the debtor-member, those distributions are redirected to the judgment creditor until the debt is paid. The charging order does not give the creditor any ownership of the membership interest. It does not give them any right to vote, manage, or influence the LLC. And it does not require the LLC to make any distributions.

In most US states, the charging order is one remedy among several available to a judgment creditor of an LLC member. In some states, the creditor can also seek foreclosure of the membership interest — effectively forcing a sale of the membership interest to satisfy the judgment. Nevis law eliminates these additional remedies entirely.

What the Nevis LLC Ordinance says

The Nevis Limited Liability Company Ordinance 1995 provides that the charging order is the exclusive remedy available to a judgment creditor of a Nevis LLC member. Foreclosure, attachment, garnishment, levy, and any other remedy against the membership interest itself are not available. The creditor is limited to the charging order and whatever distributions happen to be made to the member while the order is in effect.

This exclusive remedy provision is the specific feature that makes the Nevis LLC valuable in asset protection structures. The drafting is explicit: the charging order is not merely the primary remedy or the preferred remedy. It is the only remedy. A creditor who obtains a judgment against a Nevis LLC member has, under Nevis law, one and only one recourse against the membership interest.

What the creditor can and cannot do

Charging order: what the creditor can and cannot do
Can do	Cannot do
Receive distributions redirected to them	Force the manager to make distributions
Hold the charging order in effect while the judgment is outstanding	Seize or force sale of the membership interest
Receive tax allocations of LLC income (if applicable)	Vote on LLC decisions
Apply to the court for information about distributions	Remove or replace the manager

Why the single-member LLC is particularly effective

In a single-member Nevis LLC, the sole member is typically the trust. The manager is typically the settlor. When a charging order attaches to the trust's membership interest, the creditor gains the right to receive distributions if the manager makes them. Since the manager (the settlor) has no personal incentive to make distributions while the charging order is in effect, and since the trustee as the member controls whether distributions are ever made, the practical effect of the charging order is close to zero.

The charging order is not worthless to the creditor — it is a lien that sits on the interest and blocks transfer until satisfied. But as an enforcement mechanism, a charging order against a well-structured single-member Nevis LLC is one of the weaker remedies available in any asset protection context.

The charging order layer in a trust-and-LLC structure

In the standard Nevis trust-and-LLC structure, the charging order provides a second layer of protection below the trust. A creditor pursuing the settlor must first try to reach the membership interest through the trust layer. If the trust is challenged in Nevis, the creditor faces the NIETO's creditor bond, limitation period, and criminal standard of proof. If they somehow succeed in reaching the membership interest, they then face the Nevis LLC's exclusive charging order remedy. Two sequential barriers rather than one.

This double-layer structure is exactly why the trust-and-LLC pairing is the standard approach rather than either structure alone. See Nevis trust and LLC and Nevis LLC for the full structure.

Charging order protection under Nevis law applies specifically to the Nevis LLC membership interest. Confirm current law with a Nevis-qualified adviser.