Spouse as a member

by Carrie
(Minnesota)

If an LLC protects a person's personal assets from liability does a spouse have to be listed as a member to also be protected even if not involved in the business? Or can just the spouse running the business be listed?

Answer

A limited liability does not "protect" your personal assets by virtue of you being listed as a member. The LLC protects you because it isn't you--its debts are its own.

Just as you are not responsible for your neighbor's debts or my debts, you are not responsible for an LLC's debts.

Think of a member of an LLC as a shareholder in a company. If I'm a shareholder in Microsoft, I'm not responsible for Microsoft's debts. If I'm not a shareholder in Microsoft, I'm still not responsible for its debts. The reason I'm a shareholder is because I own a piece of the company and share in its profits.

Therefore, if you want your spouse to own part of the limited liability company, then she/he should be a member. If not, then they should not be a member.