1. Uncertificated
Security. membership interest is deemed
Most membership interests in him in California. In this way,
LLCs are held as uncertificated an uncertificated security
securities. Indeed, a representing a Wyoming LLC
membership interest in an LLC membership interest can be
is not a security, unless its subject to California’s weak
terms expressly so provide. laws. When Bob is served in a
See, UCC 8103(c). California collection case, a
to be “intangible personal
property” that accompanies
California court not only
One downside to holding an acquires personal jurisdiction
LLC as an uncertificated over Bob but all of his
security is that it usually is California holdings as well,
considered by the courts to be including uncertificated
a “general intangible.” The securities even if his LLCs
courts see the LLC ownership were formed in Wyoming.
as accompanying the owner of
the uncertificated security. A Neither Bob nor you wants this
court has jurisdiction over an result. Let’s consider a better
individual if they live in the alternative.
court’s district. Personal
jurisdiction means the court has
the ability to assert orders
2. Certificated
Security
against the individual. Thus, if a
court in California has personal There are distinct advantages
jurisdiction over a judgement to holding a membership
debtor (someone who lost in interest in an LLC as a
court and for purposes of certificated security.
example we will call “Bob”),
then the court in California also
may have in rem (property)
jurisdiction over Bob’s Wyoming
LLC. This is true even though
his LLC was formed in
Wyoming. Bob’s LLC
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