Louisiana asset protection: a civil-law state where a court shielded a single-member LLC, and a 2024 statute rebuilt the walls between affiliated companies

Louisiana is the only civil-law state in the country, and its asset protection reflects it in ways that surprise lawyers trained elsewhere. Two of those ways are genuinely favorable and recent. First, Louisiana’s charging-order statute does not say the charging order is the exclusive remedy, which usually signals a weak state, yet in 2020 a Louisiana appeals court read the statute as exclusive and refused to let a creditor seize a single-member LLC’s entire interest, protecting the sole owner where most states leave him exposed. Second, Louisiana long had a doctrine that let creditors collapse affiliated companies into one and reach a sister entity’s assets, and in 2024 the legislature rebuilt the walls, making a multi-entity structure materially safer.

The counterweight is the home. Louisiana’s homestead against creditors is only $35,000, and as a community property state it has no tenancy by the entireties. So the picture is unusual: the LLC interest and the affiliated structure are well protected, and the residence is not. Take the charging order first, because Louisiana’s result there runs against the grain.

The charging order that a court made exclusive

Start with what a personal creditor gets against your Louisiana LLC stake. The general mechanics are on the charging order protection page. Louisiana’s version is defined by a case, not just the statute.

Louisiana’s charging-order statute gives a creditor only the rights of an assignee and does not say the charging order is exclusive, yet a court read it as the exclusive remedy.

Under La. R.S. 12:1331, a court may charge a member’s interest, and the creditor holding the order has only the rights of an assignee, the distributions the member would have received, with no management rights and the member’s exemptions preserved. The statute contains no exclusive-remedy language, the words that in other states bar foreclosure and seizure. That absence usually marks a weak state. Louisiana turned out otherwise.

In AOK Property Investments v. Boudreaux, a Louisiana appeals court held the charging order is the exclusive remedy and refused to let a creditor seize a single-member LLC’s entire interest.

In AOK Property Investments, LLC v. Boudreaux, decided in 2020, the Louisiana Fifth Circuit Court of Appeal read the charging-order statute as providing the exclusive remedy and held that a creditor is precluded from seizing a single-member LLC’s 100% membership interest, absent a reverse veil piercing. That is a striking result. Most states, and Wisconsin’s rewritten statute most explicitly, treat the single-member LLC as the weak point where a creditor can take the whole company. Louisiana, through this decision, protected the sole owner’s interest from seizure. It is the opposite outcome, and it makes a single-member Louisiana LLC meaningfully stronger than one in most states. The single-member LLC page covers the general soft spot; in Louisiana, a court has, at least at the appellate level, closed it.

The doctrine that collapsed affiliated companies, and the 2024 law that stopped it

Here is the second distinctive, and it is where Louisiana was dangerous and recently became much safer.

Louisiana’s single business enterprise doctrine let a creditor of one company reach the assets of affiliated sister companies by treating them as a single enterprise.

For decades, under Green v. Champion Insurance Co., Louisiana courts applied the single business enterprise doctrine, which operates laterally rather than vertically. Ordinary veil piercing reaches up from a company to its owners. The single business enterprise doctrine reached sideways: if several affiliated companies were run as one, sharing control, management, and finances, a court could treat them as a single enterprise and impose one company’s liability on the others. For a real estate investor holding each property in a separate LLC under common ownership, that was a serious threat, because the very structure of common control and shared administration that makes a multi-entity plan efficient was the evidence used to collapse it.

In 2024 the legislature closed most of that door.

A 2024 statute bars disregarding one company’s separateness for another except on the same grounds that would pierce to an individual, and lists common control and shared management as insufficient.

La. R.S. 12:1705, effective August 1, 2024, provides that the separate legal personality of one business organization may not be disregarded as to another except on grounds that would justify disregarding it as to a natural person, the same demanding standard as ordinary veil piercing. It then says separateness may not be disregarded merely because the companies control one another or share common control, share directors, officers, members, managers, or employees, or because one makes properly documented payments on behalf of another or uses another’s property with proper documentation. In other words, the ordinary hallmarks of an affiliated real estate structure, common ownership, shared management, intercompany services, are no longer enough by themselves to collapse the entities. The single business enterprise doctrine as a soft, factor-counting route is largely gone, and a Louisiana multi-LLC structure is materially safer than it was, provided the documentation is kept clean. The piercing the veil page covers the vertical doctrine; the Louisiana point is that the lateral one, once a real danger here, has been narrowed by statute.

The veil, on the traditional alter-ego test

To reach an owner directly, a creditor still uses Louisiana’s alter-ego test.

Louisiana pierces to an owner on the alter-ego factors, weighing commingling, undercapitalization, and disregard of formalities, but only where separateness has genuinely broken down.

Under Riggins v. Dixie Shoring Co., a creditor seeking to hold an owner liable weighs factors including commingling of funds, failure to follow formalities, undercapitalization, and failure to maintain separate accounts, and the same principles apply to an LLC and now, under R.S. 12:1705, to disregarding one entity for another. The remedy is available where the owner has treated the company as indistinct from himself, but Louisiana, like most states, does not pierce for ordinary business failure. Keeping each entity genuinely separate, with its own accounts, records, and documented dealings, is what preserves both the vertical veil and, after the 2024 law, the walls between affiliates.

The home, the weak spot

Where the LLC structure is well protected, the residence is not.

Louisiana’s homestead protects only $35,000 of home equity against creditors, and as a community property state it has no tenancy by the entireties.

Under La. R.S. 20:1, a Louisiana homestead is exempt from seizure and sale up to $35,000 in value, with the exemption unlimited only for debts arising from a catastrophic or terminal illness or injury, and there is one homestead per married couple with no doubling. That $35,000 is low, and because Louisiana is a civil-law community property state, it has no tenancy by the entireties, the shield that protects a married couple’s home from one spouse’s creditor in common-law states. The marital home instead depends on the thin homestead and on community property rules, under which community property answers for community obligations. So the residence is the exposed part of a Louisiana plan, and protecting it takes deliberate work, insurance, careful characterization of separate and community property, and not relying on a homestead that stops at $35,000. The entireties page covers the shield Louisiana lacks; here, the structure protects the business assets and the home needs its own plan.

The bottom line

Louisiana’s charging-order statute gives a creditor only assignee rights and has no exclusivity language, but AOK Property Investments read it as exclusive and refused to let a creditor seize a single-member LLC’s interest.

That protection is appellate, not Supreme Court, and reverse veil piercing remains an untested route, so it is strong support rather than a guarantee.

The 2024 statute R.S. 12:1705 gutted the single business enterprise doctrine, so common control and shared management no longer collapse affiliated LLCs, making a multi-entity structure much safer.

The alter-ego test still reaches an owner who has erased the separation between himself and the company, so clean records and documented dealings matter.

The home is the weak spot, protected by only a $35,000 homestead and no entireties, so a Louisiana residence needs insurance and careful property characterization rather than reliance on the exemption.

What this page does not cover

This page is about how creditors reach you in Louisiana. What Louisiana’s civil-law fiduciary duties require, and how self-dealing is judged, is on the governance page. Louisiana’s flat income tax, the repealed franchise tax, the community-property treatment of an LLC interest, and the lack of a series LLC are on the structure and cost page. The $100 formation fee and the two-strike dissolution rule are on the filing page.

Last verified August 2026.