Mechanism 48

Charging order against an LLC membership interest

By John P. Henry · Tex. Bus. Orgs. Code § 101.112; § 153.256 (limited partnerships) · Reviewed 2026-08-02

The authority

The entry of a charging order is the exclusive remedy by which a judgment creditor of a member or of any other owner of a membership interest may satisfy a judgment out of the judgment debtor’s membership interest.Tex. Bus. Orgs. Code § 101.112(d)

Tex. Bus. Orgs. Code § 101.112; § 153.256 (limited partnerships)

When it applies

A judgment debtor whose real wealth is held in entities rather than in accounts — the closely held operating company, the single-purpose real estate LLC, the professional practice. It is the answer when post-judgment discovery turns up membership interests and nothing else worth levying on.

How it is proved up

1. Identify the entity and the interest before you file. The entity’s Public Information Report, filed with the Comptroller, lists officers and directors and in practice names the members of a member-managed company — but it is corroboration, not proof. A manager-managed company’s report may name no member at all, and percentages are never disclosed for an individual.
2. Prove the interest with post-judgment discovery under Tex. R. Civ. P. 621a — the company agreement, the membership ledger, the K-1s. That is what establishes the interest and its size.
3. Ask for the three things the order should say: that the interest is charged with payment of the judgment, that the company is to deliver any distribution otherwise due the debtor to your office, and that the order constitutes a lien on the interest.
4. Serve the company as well as the debtor. The company is the one that has to comply, and an order it never received is an order nobody follows.
5. Set the expectation with the client first. A charging order is a claim on distributions, not on the business, and a debtor who controls the entity can simply stop distributing.

What defeats it

• An entity that never distributes. The remedy is deliberately weak, and a debtor who also manages the company can wait you out — while the creditor may be allocated taxable income it never received.
• Any attempt to go further. Foreclosure of the lien is barred by § 101.112(c), and § 101.112(f) forecloses reaching the company’s own property.
• Exemption laws, preserved by § 101.112(e).
• An interest that was transferred before the judgment. The charging order reaches what the debtor owns when it is entered, which is why the timing of the transfer is worth discovery of its own.

Where I have used it

Integrated Metal Products, Inc. v. Freehill · Cause No. 11-1939-CC4, County Court at Law No. 4, Williamson County. Suit filed on a breach of contract in November 2011; the defendant was served and never answered; default judgment of $37,121.94 inclusive of fees. The judgment was then satisfied out of his membership interest in an LLC by a signed charging order directing the company to deliver any distribution otherwise due him to this office, and declaring the order a lien on the interest.

The order