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90_SB1020sam001
LRB9003480NTsbam01
1 AMENDMENT TO SENATE BILL 1020
2 AMENDMENT NO. . Amend Senate Bill 1020 by replacing
3 the title with the following:
4 "AN ACT concerning limited liability companies, amending
5 named Acts."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 4. The Corporate Fiduciary Act is amended by
9 changing Sections 1-5.09, 1-5.11, 1-6, and 3-2 as follows:
10 (205 ILCS 620/1-5.09) (from Ch. 17, par. 1551-5.09)
11 Sec. 1-5.09. "Person" means an individual, corporation,
12 partnership, joint venture, trust estate, limited liability
13 company, or unincorporated association.
14 (Source: P.A. 85-858.)
15 (205 ILCS 620/1-5.11) (from Ch. 17, par. 1551-5.11)
16 Sec. 1-5.11. Trust company. "Trust company" means a
17 corporation incorporated or a limited liability company
18 organized in this State that holds a certificate of authority
19 issued pursuant to this Act.
20 (Source: P.A. 89-364, eff. 8-18-95.)
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1 (205 ILCS 620/1-6) (from Ch. 17, par. 1551-6)
2 Sec. 1-6. General Corporate Powers. A corporate
3 fiduciary shall have the powers:
4 (a) if it is a State bank, those powers granted under
5 Sections 3 and 5 of the Illinois Banking Act, as now or
6 hereafter amended; and
7 (b) if it is a State savings and loan association, those
8 powers granted under Sections 1-6 through 1-8 of the Illinois
9 Savings and Loan Act of 1985, as now or hereafter amended;
10 and
11 (c) if it is a corporation organized under the Business
12 Corporation Act of 1983, as now or hereafter amended, or a
13 limited liability company organized under the Limited
14 Liability Company Act, those powers granted in Sections 4.01
15 through 4.24 of the Trusts and Trustees Act, as now or
16 hereafter amended, to the extent the exercise of such powers
17 by the corporate fiduciary are not contrary to the instrument
18 containing the appointment of the corporate fiduciary, the
19 court order appointing the corporate fiduciary or any other
20 statute specifically limiting the power of the corporate
21 fiduciary under the circumstances.
22 The Commissioner may specify powers of corporate
23 fiduciaries generally or of a particular corporate fiduciary
24 and by rule or order limit or restrict such powers of
25 corporate fiduciaries or a particular corporate fiduciary if
26 he finds the exercise of such power by corporate fiduciaries
27 generally or of the corporate fiduciary in particular may
28 tend to be an unsafe or unsound practice, or if such power is
29 otherwise not in the interest of beneficiaries of any
30 fiduciary appointment.
31 (Source: P.A. 86-754.)
32 (205 ILCS 620/3-2) (from Ch. 17, par. 1553-2)
33 Sec. 3-2. Change in control.
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1 (a) Before a change may occur in the ownership of
2 outstanding stock or membership interests of any trust
3 company whether by sale and purchase, gift, bequest or
4 inheritance, or any other means, which will result in control
5 or a change in the control of the trust company or before a
6 change in the control of a holding company having control of
7 the outstanding stock or membership interests of a trust
8 company whether by sale and purchase, gift, bequest or
9 inheritance, or any other means, which will result in control
10 or a change in control of the trust company or holding
11 company, the Commissioner shall be of the opinion and find:
12 (1) that the general character of its proposed
13 management, after the change in control, is such as to
14 assure reasonable promise of competent, successful, safe
15 and sound operation;
16 (2) that the future earnings prospects, after the
17 proposed change in control, are favorable; and
18 (3) that the prior business affairs of the persons
19 proposing to obtain control or by the proposed management
20 personnel, whether as stockholder, director, member,
21 officer, or customer, were conducted in a safe, sound,
22 and lawful manner.
23 (b) Persons desiring to purchase control of an existing
24 trust company and persons obtaining control by gift, bequest
25 or inheritance, or any other means shall submit to the
26 Commissioner:
27 (1) A statement of financial worth; and
28 (2) Satisfactory evidence that the prior business
29 affairs of the persons and the proposed management
30 personnel, whether as stockholder, director, officer, or
31 customer, were conducted in a safe, sound, and lawful
32 manner.
33 As used in this Section, the term "control" means the
34 ownership of such amount of stock or membership interests or
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1 ability to direct the voting of such stock or membership
2 interests as to give power to, directly or indirectly, direct
3 or cause the direction of the management or policies of the
4 trust company. A change in ownership of stock which would
5 result in direct or indirect ownership by a stockholder or
6 member, an affiliated group of stockholders or members or a
7 holding company of less than 10% of the outstanding stock or
8 membership interests shall not be considered a change of
9 control. A change in ownership of stock or membership
10 interests which would result in direct or indirect ownership
11 by a stockholder or member, an affiliated group of
12 stockholders or members or a holding company of 20% or such
13 lesser amount which would entitle the holder by applying
14 cumulative voting to elect one director shall be presumed to
15 constitute a change of control for purposes of this Section.
16 If there is any doubt as to whether a change in the ownership
17 or control of the outstanding stock or membership interests
18 is sufficient to result in obtaining control thereof or to
19 effect a change in the control thereof, such doubt shall be
20 resolved in favor of reporting the facts to the Commissioner.
21 (c) Whenever a bank makes a loan or loans, secured, or
22 to be secured, by 25% or more of the outstanding stock of a
23 trust company, the president or other chief executive officer
24 of the lending bank shall promptly report such fact to the
25 Commissioner upon obtaining knowledge of such loan or loans,
26 except that no report need be made in those cases where the
27 borrower has been the owner of record of the stock for a
28 period of one year or more, or the stock is that of a
29 newly-organized trust company prior to its opening.
30 (d) (1) Before a purchase of substantially all the
31 assets and an assumption of substantially all the liabilities
32 of a trust company or before a purchase of substantially all
33 the trust assets and an assumption of substantially all the
34 trust liabilities of a trust company, the Commissioner shall
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1 be of the opinion and find:
2 (i) that the general character of the acquirer's
3 proposed management, after the transfer, is such as to
4 assure reasonable promise of competent, successful, safe,
5 and sound operation;
6 (ii) that the acquirer's future earnings prospects,
7 after the proposed transfer, are favorable;
8 (iii) that any prior involvement by the acquirer or
9 by the proposed management personnel, whether as
10 stockholder, director, officer, agent, or customer, was
11 conducted in a safe, sound, and lawful manner;
12 (iv) that customers' interests will not be
13 jeopardized by the purchase and assumption; and
14 (v) that adequate provision has been made for all
15 obligations and trusts as required under Section 7-1 of
16 this Act.
17 (2) Persons desiring to purchase substantially all the
18 assets and assume substantially all the liabilities of a
19 trust company or to purchase substantially all the trust
20 assets and assume substantially all the trust liabilities of
21 a trust company shall submit to the Commissioner:
22 (i) a statement of financial worth; and
23 (ii) satisfactory evidence that the prior business
24 affairs of the persons and the proposed management
25 personnel, whether as stockholder, director, officer, or
26 customer, were conducted in a safe, sound, and lawful
27 manner.
28 As used in this Section, "substantially all" the assets
29 or liabilities or the trust assets or trust liabilities of a
30 trust company means that portion such that their transfer
31 will materially impair the ability of the trust company to
32 continue successful, safe, and sound operations or to
33 continue as a going concern.
34 (e) The reports required by subsections (a),(b), (c),
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1 and (d) of this Section 3-2 shall contain the following
2 information to the extent that it is known by the person
3 making the report: (1) the number of shares involved; (2) the
4 names of the sellers (or transferors); (3) the names of the
5 purchasers (or transferees); (4) the names of the beneficial
6 owners if the shares are registered in another name; (5) the
7 purchase price; (6) the total number of shares owned by the
8 sellers (or transferors), the purchasers (or transferees) and
9 the beneficial owners both immediately before and after the
10 transaction; and, (7) in the case of a loan, the name of the
11 borrower, the amount of the loan, and the name of the trust
12 company issuing the stock securing the loan and the number of
13 shares securing the loan. In addition to the foregoing, such
14 reports shall contain such other information as may be
15 available and which is requested by the Commissioner to
16 inform the Commissioner of the effect of the transaction upon
17 the trust company or trust companies whose stock or assets
18 and liabilities are involved.
19 (f) Whenever such a change as described in subsection
20 (a) of this Section 3-2 occurs, each trust company shall
21 report promptly to the Commissioner any changes or
22 replacement of its chief executive officer or of any director
23 occurring in the next 12 month period, including in its
24 report a statement of the past and current business and
25 professional affiliations of the new chief executive officer
26 or directors.
27 (Source: P.A. 88-408; 89-364, eff. 8-18-95.)
28 Section 5. The Business Corporation Act of 1983 is
29 amended by adding Section 11.39 as follows:
30 (805 ILCS 5/11.39 new)
31 Sec. 11.39. Merger of domestic corporation and limited
32 liability company.
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1 (a) Any one or more domestic corporations may merge with
2 or into one or more limited liability companies of this
3 State, any other state or states of the United States, or the
4 District of Columbia, if the laws of the other state or
5 states or the District of Columbia permit the merger. The
6 domestic corporation or corporations and the limited
7 liability company or companies may merge with or into a
8 corporation, which may be any one of these corporations, or
9 they may merge with or into a limited liability company,
10 which may be any one of these limited liability companies,
11 which shall be a domestic corporation or limited liability
12 company of this State, any other state of the United States,
13 or the District of Columbia, which permits the merger
14 pursuant to a plan of merger complying with and approved in
15 accordance with this Section.
16 (b) The plan of merger must set forth the following:
17 (1) The names of the domestic corporation or
18 corporations and limited liability company or companies
19 proposing to merge and the name of the domestic
20 corporation or limited liability company into which they
21 propose to merge, which is designated as the surviving
22 entity.
23 (2) The terms and conditions of the proposed merger
24 and the mode of carrying the same into effect.
25 (3) The manner and basis of converting the shares
26 of each domestic corporation and the interests of each
27 limited liability company into shares, interests,
28 obligations, other securities of the surviving entity or
29 into cash or other property or any combination of the
30 foregoing.
31 (4) In the case of a merger in which a domestic
32 corporation is the surviving entity, a statement of any
33 changes in the articles of incorporation of the surviving
34 corporation to be effected by the merger.
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1 (5) Any other provisions with respect to the
2 proposed merger that are deemed necessary or desirable,
3 including provisions, if any, under which the proposed
4 merger may be abandoned prior to the filing of the
5 articles of merger by the Secretary of State of this
6 State.
7 (c) The plan required by subsection (b) of this Section
8 shall be adopted and approved by the constituent corporation
9 or corporations in the same manner as is provided in Sections
10 11.05, 11.15, and 11.20 of this Act and, in the case of a
11 limited liability company, in accordance with the terms of
12 its operating agreement, if any, and in accordance with the
13 laws under which it was formed.
14 (d) Upon this approval, articles of merger shall be
15 executed by each constituent corporation and limited
16 liability company and filed as provided in Section 11.25 of
17 this Act and shall be recorded with respect to each
18 constituent corporation as provided in Section 11.45 of this
19 Act. The merger shall become effective for all purposes of
20 the laws of this State when and as provided in Section 11.40
21 of this Act with respect to the merger of corporations of
22 this State.
23 (e) If the surviving entity is to be governed by the
24 laws of the District of Columbia or any state other than this
25 State, it shall file with the Secretary of State of this
26 State an agreement that it may be served with process in this
27 State in any proceeding for enforcement of any obligation of
28 any constituent corporation or limited liability company of
29 this State, as well as for enforcement of any obligation of
30 the surviving corporation or limited liability company
31 arising from the merger, including any suit or other
32 proceeding to enforce the shareholders right to dissent as
33 provided in Section 11.70 of this Act, and shall irrevocably
34 appoint the Secretary of State of this State as its agent to
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1 accept service of process in any such suit or other
2 proceedings.
3 (f) Section 11.50 of this Act shall, insofar as it is
4 applicable, apply to mergers between domestic corporations
5 and limited liability companies.
6 Section 10. The Limited Liability Company Act is amended
7 by changing the heading of Articles 25 and 35 and Sections
8 1-5, 1-10, 1-25, 1-30, 1-35, 1-40, 5-1, 5-5, 5-15, 5-25,
9 5-45, 5-50, 10-1, 10-10, 10-15, 15-1, 15-5, 20-5, 25-1,
10 30-1, 30-5, 30-10, 30-20, 35-1, 35-10, 35-20, 35-30, 40-1,
11 40-5, 45-1, 45-5, 45-35, 50-1, 50-10, 50-15, and 60-1 and
12 adding Articles 13 and 37 and Sections 1-43, 15-3, 15-7,
13 15-20, 25-30, 25-35, 25-45, 25-50, 35-3, 35-4, 35-7, 35-45,
14 35-50, 35-55, 35-60, 35-65, 35-70, 45-65, 50-50, and 55-15
15 as follows:
16 (805 ILCS 180/1-5)
17 Sec. 1-5. Definitions. As used in this Act, unless the
18 context otherwise requires:
19 "Anniversary" means that day every year exactly one or
20 more years after: (i) the date the articles of organization
21 filed under Section 5-5 of this Act were filed by the Office
22 of the Secretary of State, in the case of a limited liability
23 company; or (ii) the date the application for admission to
24 transact business filed under Section 45-5 of this Act was
25 filed by the Office of the Secretary of State, in the case of
26 a foreign limited liability company.
27 "Anniversary month" means the month in which the
28 anniversary of the limited liability company occurs.
29 "Articles of organization" means the articles of
30 organization filed by the Secretary of State for the purpose
31 of forming a limited liability company as specified in
32 Article 5.
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1 "Assumed limited liability company name" means any
2 limited liability company name other than the true limited
3 liability company name, except that the identification by a
4 limited liability company of its business with a trademark or
5 service mark of which it is the owner or licensed user shall
6 not constitute the use of an assumed name under this Act.
7 "Bankruptcy" means bankruptcy under the Federal
8 Bankruptcy Code of 1978, Title 11, Chapter 7 of the United
9 States Code.
10 "Business" includes every trade, occupation, profession,
11 and other lawful purpose, whether or not carried on for
12 profit. "Book value" of a membership interest means the
13 aggregate value of a member's total contributions to capital
14 as recorded on the books of the limited liability company at
15 the time of contribution, other than contribution of services
16 or an unexecuted obligation to contribute property or perform
17 services, adjusted for additional contributions and returns
18 of contributions, but unadjusted by any operating profits or
19 losses.
20 "Contribution" means any cash, property, or services
21 rendered or a promissory note or other binding obligation to
22 contribute cash or property or to perform services, that a
23 person contributes to the limited liability company in that
24 person's capacity as a member.
25 "Court" includes every court and judge having
26 jurisdiction in a case.
27 "Debtor in bankruptcy" means a person who is the subject
28 of an order for relief under Title 11 of the United States
29 Code, a comparable order under a successor statute of general
30 application, or a comparable order under federal, state, or
31 foreign law governing insolvency.
32 "Distribution" means a transfer of money, property, or
33 other benefit from "Foreign limited liability company" means
34 either (1) an unincorporated entity formed under a statute of
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1 a jurisdiction within the United States comparable to this
2 Act or (2) if formed under a statute of a foreign country, an
3 entity having characteristics substantially similar to those
4 of a limited liability company to a member in the member's
5 capacity as a member or to a transferee of the member's
6 distributional interest. as determined by the Secretary of
7 State.
8 "Distributional interest" means all of a member's
9 interest in distributions by the limited liability company.
10 "Entity" means a person other than an individual.
11 "Federal employer identification number" means either (i)
12 the federal employer identification number assigned by the
13 Internal Revenue Service to the limited liability company or
14 foreign limited liability company or (ii) in the case of a
15 limited liability company or foreign limited liability
16 company not required to have a federal employer
17 identification number, any other number that may be assigned
18 by the Internal Revenue Service for purposes of
19 identification.
20 "Foreign limited liability company" means an
21 unincorporated entity organized under laws other than the
22 laws of this State that afford limited liability to its
23 owners comparable to the liability under Section 10-10 and is
24 not required to register to transact business under any law
25 of this State other than this Act.
26 "Insolvent" means that a limited liability company is
27 unable to pay its debts as they become due in the usual
28 course of its business.
29 "Limited liability company" or "company" means a limited
30 liability company organized and existing under this Act.
31 "Manager" means a person, whether or not a member of a
32 manager-managed company, who is vested with authority under
33 Section 13-5. person elected by the members of a limited
34 liability company to manage the company pursuant to Section
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1 15-1.
2 "Manager-managed company" means a limited liability
3 company which is so designated in its articles of
4 organization.
5 "Member" means a person who becomes a member of the
6 limited liability company upon formation of the company or in
7 the manner and at the time provided in the operating
8 agreement or, if the operating agreement does not so provide,
9 in the manner and at the time provided in this Act with an
10 ownership interest in a limited liability company with the
11 rights and obligations specified under this Article.
12 "Member-managed company" means a limited liability
13 company other than a manager-managed company.
14 "Membership interest" means a member's rights in the
15 limited liability company, including the member's share of
16 the profits and losses of the limited liability company and
17 the right to receive distributions of the limited liability
18 company's assets.
19 "Operating agreement" means the agreement under Section
20 15-5 concerning the relations among the members, managers,
21 and any valid agreement, written or oral, of the members as
22 to the affairs of a limited liability company. The term
23 "operating agreement" includes amendments to the agreement.
24 and the conduct of its business.
25 "Organizer" means one of the signers of the original
26 articles of organization.
27 "Person" means an individual, partnership, domestic or
28 foreign limited partnership, limited liability company or
29 foreign limited liability company, trust, estate,
30 association, corporation, governmental body, or other
31 juridical being.
32 "Registered office" means that office maintained by the
33 limited liability company in this State, the address,
34 including street, number, city and county, of which is on
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1 file in the office of the Secretary of State, at which, any
2 process, notice, or demand required or permitted by law may
3 be served upon the registered agent of the limited liability
4 company.
5 "Registered agent" means a person who is an agent for
6 service of process on the limited liability company who is
7 appointed by the limited liability company and whose address
8 is the registered office of the limited liability company.
9 "Restated articles of organization" means the articles of
10 organization restated as provided in Section 5-30.
11 "State" means a state, territory, or possession of the
12 United States, the District of Columbia, or the Commonwealth
13 of Puerto Rico.
14 "Transfer" includes an assignment, conveyance, deed, bill
15 of sale, lease, mortgage, security interest, encumbrance, and
16 gift.
17 (Source: P.A. 87-1062.)
18 (805 ILCS 180/1-10)
19 Sec. 1-10. Limited liability company name.
20 (a) The name of each limited liability company as set
21 forth in its articles of organization:
22 (1) shall contain the terms words "limited
23 liability company", or "L.L.C.", or "LLC";
24 (2) may not contain a word or phrase, or an
25 abbreviation or derivation thereof, the use of which is
26 prohibited or restricted by any other statute of this
27 State unless the restriction has been complied with;
28 (3) shall consist of letters of the English
29 alphabet, Arabic or Roman numerals, or symbols capable of
30 being readily reproduced by the Office of the Secretary
31 of State;
32 (4) shall not contain any of the following terms:
33 "Corporation," "Corp.," "Incorporated," "Inc.," "Ltd.,"
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1 "Co.," "Limited Partnership" or "L.P."; and
2 (5) shall be the name under which the limited
3 liability company transacts business in this State unless
4 the limited liability company also elects to adopt an
5 assumed name or names as provided in this Act; provided,
6 however, that the limited liability company may use any
7 divisional designation or trade name without complying
8 with the requirements of this Act, provided the limited
9 liability company also clearly discloses its name;.
10 (6) shall not contain any word or phrase that
11 indicates or implies that the limited liability company
12 is authorized or empowered to be in the business of a
13 corporate fiduciary unless otherwise permitted by the
14 Commissioner of the Office of Banks and Real Estate under
15 Section 1-9 of the Corporate Fiduciary Act. The word
16 "trust", "trustee", or "fiduciary" may be used by a
17 limited liability company only if it has first complied
18 with Section 1-9 of the Corporate Fiduciary Act; and
19 (7) shall contain the word "trust", if it is a
20 limited liability company organized for the purpose of
21 accepting and executing trusts.
22 (b) Nothing in this Section or Section 1-20 shall
23 abrogate or limit the common law or statutory law of unfair
24 competition or unfair trade practices, nor derogate from the
25 common law or principles of equity or the statutes of this
26 State or of the United States of America with respect to the
27 right to acquire and protect copyrights, trade names,
28 trademarks, service marks, service names, or any other right
29 to the exclusive use of names or symbols.
30 (c) The name shall not contain any word or phrase that
31 indicates or implies that it is organized for any purposes
32 other than those permitted by this Act as limited by its
33 articles of organization.
34 (d) The name shall be distinguishable upon the records
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1 in the Office of the Secretary of State from all of the
2 following:
3 (1) Any limited liability company that has articles
4 of organization filed with the Secretary of State under
5 Section 5-5.
6 (2) Any foreign limited liability company admitted
7 to transact business in this State.
8 (3) Any name for which an exclusive right has been
9 reserved in the Office of the Secretary of State under
10 Section 1-15.
11 (4) Any assumed name that is registered with the
12 Secretary of State under Section 1-20.
13 (e) The provisions of subsection (d) of this Section
14 shall not apply if the organizer files with the Secretary of
15 State a certified copy of a final decree of a court of
16 competent jurisdiction establishing the prior right of the
17 applicant to the use of that name in this State.
18 (f) The Secretary of State shall determine whether a
19 name is "distinguishable" from another name for the purposes
20 of this Act. Without excluding other names that may not
21 constitute distinguishable names in this State, a name is not
22 considered distinguishable, for purposes of this Act, solely
23 because it contains one or more of the following:
24 (1) The word "limited", "liability" or "company" or
25 an abbreviation of one of those words.
26 (2) Articles, conjunctions, contractions,
27 abbreviations, or different tenses or number of the same
28 word.
29 (Source: P.A. 87-1062.)
30 (805 ILCS 180/1-25)
31 Sec. 1-25. Nature of business. A limited liability
32 company may be formed for carry on any lawful purpose or
33 business except:
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1 (1) banking, exclusive of fiduciaries organized for
2 the purpose of accepting and executing trusts;
3 (2) insurance unless carried on as a business of a
4 syndicate or limited syndicate under Article V 1/2 of the
5 Illinois Insurance Code;
6 (3) the practice of dentistry unless all the
7 members and managers are licensed as dentists under the
8 Illinois Dental Practice Act; or
9 (4) the practice of medicine unless all the members
10 and managers are licensed to practice medicine under the
11 Medical Practice Act of 1987.
12 (Source: P.A. 88-573, eff. 8-11-94; 89-201, eff. 1-1-96.)
13 (805 ILCS 180/1-30)
14 Sec. 1-30. Powers. Each limited liability company
15 organized and existing under this Act may do all of the
16 following:
17 (1) Sue and be sued, complain and defend, and
18 participate in administrative or other proceedings, in its
19 name.
20 (2) Have a seal, which may be altered at pleasure, and
21 use the same by causing it, or a facsimile thereof, to be
22 impressed or affixed or in any other manner reproduced,
23 provided that the affixing of a seal to an instrument shall
24 not give the instrument additional force or effect, or change
25 the construction thereof, and the use of a seal is not
26 mandatory.
27 (3) Purchase, take, receive, lease as lessee, take by
28 gift, legacy, or otherwise acquire, own, hold, use, and
29 otherwise deal in and with any real or personal property, or
30 any interest therein, wherever situated.
31 (4) Sell, convey, mortgage, pledge, lease as lessor, and
32 otherwise dispose of all or any part of its property and
33 assets.
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1 (5) Lend money to and otherwise assist its members and
2 employees, except as otherwise provided in the operating
3 agreement or articles of organization.
4 (6) Purchase, take, receive, subscribe for or otherwise
5 acquire, own, hold, vote, use, employ, sell, mortgage, loan,
6 pledge, or otherwise dispose of, and otherwise use and deal
7 in and with, shares or other interests in or obligations of
8 other limited liability companies, domestic or foreign
9 corporations, associations, general or limited partnerships,
10 or individuals.
11 (7) Incur liabilities, borrow money for its proper
12 purposes at any rate of interest the limited liability
13 company may determine without regard to the restrictions of
14 any usury law of this State, issue notes, bonds, and other
15 obligations, secure any of its obligations by mortgage or
16 pledge or deed of trust of all or any part of its property,
17 franchises, and income, and make contracts, including
18 contracts of guaranty and suretyship.
19 (8) Invest its surplus funds from time to time, lend
20 money for its proper purposes, and take and hold real and
21 personal property as security for the payment of funds so
22 loaned or invested.
23 (9) Conduct its business, carry on its operations, have
24 offices within and without this State, and exercise in any
25 other state, territory, district, or possession of the United
26 States or in any foreign country the powers granted by this
27 Act.
28 (10) Elect managers and appoint agents of the limited
29 liability company, define their duties, and fix their
30 compensation.
31 (11) Enter into or amend an Make and alter one or more
32 operating agreement agreements, not inconsistent with its
33 articles of organization or with the laws of this State, for
34 the administration and regulation of the affairs of the
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1 limited liability company.
2 (12) Make donations for the public welfare or for
3 charitable, scientific, religious, or educational purposes,
4 lend money to the government, and transact any lawful
5 business in aid of the United States.
6 (13) Establish deferred compensation plans, pension
7 plans, profit-sharing plans, bonus plans, option plans, and
8 other incentive plans for its managers and employees and make
9 the payments provided for therein.
10 (14) Become a promoter, partner, member, associate, or
11 manager of any general partnership, limited partnership,
12 joint venture or similar association, any other limited
13 liability company, or other enterprise.
14 (15) Have and exercise all powers necessary or
15 convenient to effect any or all of the purposes for which the
16 limited liability company is organized.
17 (Source: P.A. 87-1062.)
18 (805 ILCS 180/1-35)
19 Sec. 1-35. Registered office and registered agent.
20 (a) Each limited liability company and foreign limited
21 liability company shall continuously maintain in this State a
22 registered agent and registered office, which agent must be
23 an individual resident of this State, a domestic corporation,
24 or a foreign corporation having a place of business in, and
25 authorized to do business in, this State. If the agent is a
26 corporation, the corporation must be authorized by its
27 articles of incorporation to act as an agent.
28 (b) A limited liability company or foreign limited
29 liability company may change its registered agent or the
30 address of its registered office pursuant to Section 5-15 or
31 5-20.
32 (c) The registered agent may at any time resign by
33 filing in the Office of the Secretary of State written notice
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1 thereof and by mailing a copy thereof to the limited
2 liability company or foreign limited liability company at its
3 principal office as it is known to the resigning registered
4 agent. The notice must be mailed at least 10 days before the
5 date of filing thereof with the Secretary of State. The
6 notice shall be executed by the registered agent, if an
7 individual, or by a principal officer, if the registered
8 agent is a corporation. The notice shall set forth all of
9 the following:
10 (1) The name of the limited liability company for
11 which the registered agent is acting.
12 (2) The name of the registered agent.
13 (3) The address, including street, number, city and
14 county of the limited liability company's then registered
15 office in this State.
16 (4) That the registered agent resigns.
17 (5) The effective date of the resignation, which
18 shall not be sooner than 30 days after the date of
19 filing.
20 (6) The address of the principal office of the
21 limited liability company as it is known to the
22 registered agent.
23 (7) A statement that a copy of the notice has been
24 sent by registered or certified mail to the principal
25 office of the limited liability company within the time
26 and in the manner prescribed by this Section.
27 (Source: P.A. 87-1062.)
28 (805 ILCS 180/1-40)
29 Sec. 1-40. Records to be kept.
30 (a) Each limited liability company shall keep at the
31 registered office or the principal place of business of the
32 company named in the articles of organization or other
33 reasonable locations specified in the operating agreement all
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1 of the following:
2 (1) A list of the full name and last known address
3 of each member setting forth the amount of cash each
4 member has contributed, a description and statement of
5 the agreed value of the other property or services each
6 member has contributed or has agreed to contribute in the
7 future, and the date on which each became a member.
8 (2) A copy of the articles of organization, as
9 amended or restated, together with executed copies of any
10 powers of attorney under which any articles, application,
11 or certificate has been executed.
12 (3) Copies of the limited liability company's
13 federal, State, and local income tax returns and reports,
14 if any, for the 3 most recent years.
15 (4) Copies of any then effective written operating
16 agreement and any amendments thereto and of any financial
17 statements of the limited liability company for the 3
18 most recent years.
19 (5) Unless contained in the articles of
20 organization or an operating agreement, a writing
21 prepared by a manager or managers as specifically
22 authorized by the members or, if there are no managers,
23 all of the members or the member or members that may be
24 designated by the members pursuant to limited liability
25 company action properly taken under Section 10-5, setting
26 out all of the following:
27 (A) The times at which or events on the
28 happening of which any additional contributions
29 agreed to be made by each member are to be made.
30 (B) Any right of a member to receive
31 distributions that include a return of all or any
32 part of the member's contribution.
33 (C) Any power of a member to grant the right
34 to become a member to an assignee of any part of the
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1 member's limited liability company interest, and the
2 terms and conditions of the power.
3 (b) Records kept under this Section may be inspected and
4 copied at the request and expense of any member or legal
5 representative of a deceased member or member under legal
6 disability during ordinary business hours.
7 (Source: P.A. 87-1062.)
8 (805 ILCS 180/1-43 new)
9 Sec. 1-43. Supplemental principles of law. Unless
10 displaced by particular provisions of this Act, the
11 principles of law and equity supplement this Act.
12 (805 ILCS 180/5-1)
13 Sec. 5-1. Organization.
14 (a) One or more persons, other than natural persons
15 under 18 years of age, may organize a limited liability
16 company by executing and delivering articles of organization
17 to the Secretary of State as specified in Sections 5-5 and
18 5-45. The organizers need not be members of the limited
19 liability company. Each organizer of a limited liability
20 company organized to engage in the practice of medicine shall
21 be a licensed physician of this State. The execution of the
22 articles of organization constitutes an affirmation by the
23 person, under penalty of perjury, that the facts stated
24 therein are true.
25 (b) A limited liability company shall have one 2 or more
26 members.
27 (c) A limited liability company is a legal entity
28 distinct from its members.
29 (Source: P.A. 89-201, eff. 1-1-96.)
30 (805 ILCS 180/5-5)
31 Sec. 5-5. Articles of organization.
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1 (a) The articles of organization shall set forth all of
2 the following:
3 (1) The name of the limited liability company and
4 the address of its principal place of business which may,
5 but need not be a place of business in this State.
6 (2) The purposes for which the limited liability
7 company is organized, which may be stated to be, or to
8 include, the transaction of any or all lawful businesses
9 for which limited liability companies may be organized
10 under this Act.
11 (3) The name of its registered agent and the
12 address of its registered office.
13 (4) If the limited liability company is to be
14 managed by a manager or managers, the names and business
15 addresses of the initial manager or managers.
16 (5) If management of the limited liability company
17 is to be vested in retained, in whole or in part, by the
18 members under Section 15-1, then the names and addresses
19 of the initial member or members.
20 (6) The latest date, if any, upon which the limited
21 liability company is to dissolve and other events of
22 dissolution, if any, that may be agreed upon by the
23 members under Section 35-1 hereof.
24 (7) The name and address of each organizer.
25 (8) Any other provision, not inconsistent with law,
26 that the members elect to set out in the articles of
27 organization for the regulation of the internal affairs
28 of the limited liability company, including any
29 provisions that, under this Act, are required or
30 permitted to be set out in the operating agreement of the
31 limited liability company.
32 (b) A limited liability company is organized at the time
33 articles of organization are filed by the Secretary of State
34 or at any later time, not more than 60 days after the filing
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1 of the articles of organization, specified in the articles of
2 organization.
3 (c) Articles of organization for the organization of a
4 limited liability company for the purpose of accepting and
5 executing trusts shall not be filed by the Secretary of State
6 until there is delivered to him or her a statement executed
7 by the Commissioner of the Office of Banks and Real Estate
8 that the organizers of the limited liability company have
9 made arrangements with the Commissioner of the Office of
10 Banks and Real Estate to comply with the Corporate Fiduciary
11 Act.
12 (Source: P.A. 87-1062.)
13 (805 ILCS 180/5-15)
14 Sec. 5-15. Amendment by managers. A majority of the
15 managers of a limited liability company may adopt one or more
16 amendments to its articles of organization without member
17 action to do any of the following:
18 (1) To remove the name and address of any manager named
19 in the articles of organization who is no longer a manager.
20 (2) To remove the name and address of the initial
21 registered agent or the address of the initial registered
22 office, if a statement of change is on file with the
23 Secretary of State.
24 (3) To change the company name by substituting the words
25 "limited liability company" for the abbreviation "L.L.C." or
26 "LLC" or vice versa, or by adding a geographical attribution
27 to the name.
28 (4) To restate its articles of organization as currently
29 amended; such articles supersede the original articles and
30 all amendments thereto.
31 (Source: P.A. 87-1062.)
32 (805 ILCS 180/5-25)
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1 Sec. 5-25. Articles of amendment. The articles of
2 amendment shall be executed and filed in duplicate and shall
3 set forth the following:
4 (1) The name of the limited liability company.
5 (2) The text of each amendment adopted.
6 (3) When the amendment was adopted by the managers:
7 (A) a statement that the amendment was approved by
8 not less than the minimum number of managers necessary to
9 approve the amendment adopted by a majority of the
10 managers; and
11 (B) a statement that member action was not
12 required.
13 (4) When the amendment was adopted by the members,: a
14 statement that the amendment was approved by not less than
15 the minimum number of members necessary to approve the
16 amendment.
17 (A) a statement that the amendment was adopted at a
18 meeting of members by the affirmative vote of not less
19 than the minimum number of votes necessary to adopt the
20 amendment, as provided by the articles of organization;
21 or
22 (B) a statement that the amendment was adopted by
23 written consent signed by the members having not less
24 than the minimum number of votes necessary to adopt the
25 amendment, as provided by the articles of organization.
26 (5) The date on which the amendment is to become
27 effective, if the amendment is to become effective after the
28 date on which the articles of amendment are filed.
29 (Source: P.A. 87-1062.)
30 (805 ILCS 180/5-45)
31 Sec. 5-45. Forms, execution, acknowledgement and filing.
32 (a) All reports required by this Act to be filed in the
33 Office of the Secretary of State shall be made on forms
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1 prescribed and furnished by the Secretary of State. Forms
2 for all other documents to be filed in the Office of the
3 Secretary of State shall be furnished by the Secretary of
4 State upon request therefor, but the use thereof, unless
5 otherwise specifically prescribed in this Act, shall not be
6 mandatory.
7 (b) Whenever any provision of this Act specifically
8 requires any document to be executed by the limited liability
9 company in accordance with this Section, unless otherwise
10 specifically stated in this Act and subject to any additional
11 provisions of this Act, the document shall be executed, in
12 ink, as follows:
13 (1) The articles of organization shall be signed by
14 the organizer or organizers.
15 (2) All other documents shall be signed:
16 (A) by a manager and verified by him or her;
17 or
18 (B) if there are no managers, then by the
19 members or those of them that may be designated by a
20 majority vote of the members.
21 (c) The name of a person signing the document and the
22 capacity in which the person signs shall be stated beneath or
23 opposite the person's signature.
24 (d) The execution of any document required by this Act
25 by a member or manager constitutes an affirmation under the
26 penalties of perjury that the facts stated therein are true
27 and that the person has authority to execute the document.
28 (e) When filed in the Office of the Secretary of State,
29 an authorization, including a power of attorney, to sign a
30 record must be in writing, then sworn to, verified, or
31 acknowledged.
32 (Source: P.A. 87-1062.)
33 (805 ILCS 180/5-50)
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1 Sec. 5-50. Amendment or dissolution by judicial act. If
2 a person required by Section 5-45 to execute an amendment or
3 articles of dissolution fails or refuses to do so, any other
4 member and any transferee assignee of a limited liability
5 company interest, who is adversely affected by the failure or
6 refusal, may petition a court to direct the amendment or
7 dissolution. If the court finds that the amendment or
8 dissolution is proper and that any person so designated has
9 failed or refused to execute the amendment or articles of
10 dissolution, it shall order the Secretary of State to record
11 an appropriate amendment or dissolution.
12 (Source: P.A. 87-1062.)
13 (805 ILCS 180/10-1)
14 Sec. 10-1. Admission of members. After the filing of
15 the articles of organization, a person who acquires a
16 membership interest directly from the limited liability
17 company or is a transferee an assignee of a membership
18 interest may be admitted as a member as provided in the
19 operating agreement or in the articles of organization or, if
20 the operating agreement or articles of organization do not
21 provide for the admission of those persons, then with
22 unanimous consent of the members.
23 (Source: P.A. 87-1062.)
24 (805 ILCS 180/10-10)
25 Sec. 10-10. Liability of members and managers.
26 (a) Except as otherwise provided in subsection (d) of
27 this Section, the debts, obligations, and liabilities A
28 member of a limited liability company, whether arising in
29 contract, tort, or otherwise, are solely the debts,
30 obligations, and liabilities of the company. A member or
31 manager is not shall be personally liable for a any act,
32 debt, obligation, or liability of the company solely by
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1 reason of being or acting as a member or manager limited
2 liability company or another member or manager to the extent
3 that a shareholder of an Illinois business corporation is
4 liable in analogous circumstances under Illinois law.
5 (b) (Blank). A manager of a limited liability company
6 shall be personally liable for any act, debt, obligation, or
7 liability of the limited liability company or another manager
8 or member to the extent that a director of an Illinois
9 business corporation is liable in analogous circumstances
10 under Illinois law.
11 (c) The failure of a limited liability company to
12 observe the usual company formalities or requirements
13 relating to the exercise of its company powers or management
14 of its business is not a ground for imposing personal
15 liability on the members or managers for liabilities of the
16 company.
17 (d) All or specified members of a limited liability
18 company are liable in their capacity as members for all or
19 specified debts, obligations, or liabilities of the company
20 if:
21 (1) a provision to that effect is contained in the
22 articles of organization; and
23 (2) a member so liable has consented in writing to
24 the adoption of the provision or to be bound by the
25 provision.
26 (Source: P.A. 87-1062.)
27 (805 ILCS 180/10-15)
28 Sec. 10-15. Member's right to information Information and
29 accounting.
30 (a) A limited liability company shall provide members
31 and their agents and attorneys access to its records,
32 including the records required to be kept under Section 1-40,
33 at the company's principal place of business or other
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1 reasonable locations specified in the operating agreement.
2 The company shall provide former members and their agents and
3 attorneys access for proper purposes to records pertaining to
4 the period during which they were members. The right of
5 access provides the opportunity to inspect and copy records
6 during ordinary business hours. The company may impose a
7 reasonable charge, limited to the costs of labor and
8 material, for copies of records furnished.
9 (b) A member has the right upon written demand given to
10 the limited liability company to obtain at the company's
11 expense a copy of any written operating agreement. A member
12 of a limited liability company shall have the right to do all
13 of the following:
14 (1) To inspect and copy limited liability company
15 records required by Section 1-40 to be kept.
16 (2) To obtain from the manager or managers from time to
17 time, subject to reasonable standards which may be set forth
18 in the articles of organization, the operating agreement, or
19 otherwise established by the manager or managers, upon
20 reasonable demand for any purpose reasonably related to the
21 member's interest as a member:
22 (A) true and full information regarding the state
23 of the business and financial condition of the limited
24 liability company and any other information regarding the
25 affairs of the limited liability company; and
26 (B) promptly after becoming available, a copy of
27 the limited liability company's federal, State, and local
28 income tax returns for each year.
29 (3) To have a formal accounting of limited liability
30 company affairs whenever circumstances render it just and
31 reasonable.
32 (Source: P.A. 87-1062.)
33 (805 ILCS 180/Art. 13 heading new)
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1 Article 13. Relations of members and managers to
2 persons dealing with limited liability company
3 (805 ILCS 180/13-5 new)
4 Sec. 13-5. Agency of members and managers.
5 (a) Subject to subsections (b) and (c):
6 (1) Each member is an agent of the limited
7 liability company for the purpose of its business, and an
8 act of a member, including the signing of an instrument
9 in the company's name, for apparently carrying on, in the
10 ordinary course, the company's business or business of
11 the kind carried on by the company binds the company,
12 unless the member had no authority to act for the company
13 in the particular matter and the person with whom the
14 member was dealing knew or had notice that the member
15 lacked authority.
16 (2) An act of a member that is not apparently for
17 carrying on, in the ordinary course, the company's
18 business or business of the kind carried on by the
19 company binds the company only if the act was authorized
20 by the other members.
21 (b) Subject to subsection (c), in a manager-managed
22 company:
23 (1) A member is not an agent of the company for the
24 purpose of its business solely by reason of being a
25 member. Each manager is an agent of the company for the
26 purpose of its business, and an act of a manager,
27 including the signing of an instrument in the company's
28 name, for apparently carrying on, in the ordinary course,
29 the company's business or business of the kind carried on
30 by the company binds the company, unless the manager had
31 no authority to act for the company in the particular
32 matter and the person with whom the manager was dealing
33 knew or had notice that the manager lacked authority.
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1 (2) An act of a manager which is not apparently for
2 carrying on, in the ordinary course, the company's
3 business or business of the kind carried on by the
4 company binds the company only if the act was authorized
5 under Section 15-1.
6 (c) Unless the articles of organization limit their
7 authority, any member of a member-managed company or manager
8 of a manager-managed company may sign and deliver any
9 instrument transferring or affecting the company's interest
10 in real property. The instrument is conclusive in favor of a
11 person who gives value without knowledge of the lack of the
12 authority of the person signing and delivering the
13 instrument.
14 (805 ILCS 180/13-10 new)
15 Sec. 13-10. Limited liability company liable for member
16 or manager's actionable conduct. A limited liability company
17 is liable for loss or injury caused to a person, or for a
18 penalty incurred, as a result of a wrongful act or omission,
19 or other actionable conduct, of a member or manager acting in
20 the ordinary course of business of the company or with
21 authority of the company.
22 (805 ILCS 180/15-1)
23 Sec. 15-1. Management of limited liability company.
24 (a) In a member-managed company:
25 (1) each member has equal rights in the management
26 and conduct of the company's business; and
27 (2) except as otherwise provided in subsection (c)
28 of this Section, any matter relating to the business of
29 the company may be decided by a majority of the members.
30 (b) In a manager-managed company:
31 (1) each manager has equal rights in the management
32 and conduct of the company's business;
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1 (2) except as otherwise provided in subsection (c)
2 of this Section, any matter relating to the business of
3 the company may be exclusively decided by the manager or,
4 if there is more than one manager, by a majority of the
5 managers; and
6 (3) a manager:
7 (A) must be designated, appointed, elected,
8 removed, or replaced by a vote, approval, or consent
9 of a majority of the members; and
10 (B) holds office until a successor has been
11 elected and qualified, unless the manager sooner
12 resigns or is removed.
13 (c) The only matters of a member or manager-managed
14 company's business requiring the consent of all of the
15 members are the following:
16 (1) the amendment of the operating agreement under
17 Section 15-5;
18 (2) an amendment to the articles of organization
19 under Article 5;
20 (3) the compromise of an obligation to make a
21 contribution under Section 20-5;
22 (4) the compromise, as among members, of an
23 obligation of a member to make a contribution or return
24 money or other property paid or distributed in violation
25 of this Act;
26 (5) the making of interim distributions under
27 subsection (a) of Section 25-1, including the redemption
28 of an interest;
29 (6) the admission of a new member;
30 (7) the use of the company's property to redeem an
31 interest subject to a charging order;
32 (8) the consent to dissolve the company under
33 subdivision (2) of subsection (a) of Section 35-1;
34 (9) a waiver of the right to have the company's
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1 business wound up and the company terminated under
2 Section 35-3;
3 (10) the consent of members to merge with another
4 entity under Section 37-20; and
5 (11) the sale, lease, exchange, or other disposal
6 of all, or substantially all, of the company's property
7 with or without goodwill.
8 (d) Action requiring the consent of members or managers
9 under this Act may be taken without a meeting.
10 (e) A member or manager may appoint a proxy to vote or
11 otherwise act for the member or manager by signing an
12 appointment instrument, either personally or by the member or
13 manager's attorney-in-fact. Management of the limited
14 liability company shall be vested in its members; however, if
15 the articles of organization so provide, the management of
16 the limited liability company may be vested, in whole or in
17 part, in a manager or managers who shall be elected by the
18 members in the manner prescribed by the operating agreement
19 or articles of organization of the limited liability company.
20 A manager or managers shall have the authority and
21 responsibility accorded to them by the operating agreement or
22 articles of organization, and the members shall not have the
23 authority and responsibility accorded to the managers, unless
24 specifically retained by them in the operating agreement or
25 the articles of organization. If the articles of
26 organization do not provide for the management of the limited
27 liability company by a manager or managers, instruments and
28 documents shall be valid and binding upon the limited
29 liability company if executed by any one or more of the
30 members unless otherwise provided in the articles of
31 organization.
32 (Source: P.A. 87-1062.)
33 (805 ILCS 180/15-3 new)
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1 Sec. 15-3. General standards of member and manager's
2 conduct.
3 (a) The fiduciary duties a member owes to a
4 member-managed company and its other members include the duty
5 of loyalty and the duty of care referred to in subsections
6 (b) and (c) of this Section.
7 (b) A member's duty of loyalty to a member-managed
8 company and its other members includes the following:
9 (1) to account to the company and to hold as
10 trustee for it any property, profit, or benefit derived
11 by the member in the conduct or winding up of the
12 company's business or derived from a use by the member of
13 the company's property, including the appropriation of a
14 company's opportunity;
15 (2) to act fairly when a member deals with the
16 company in the conduct or winding up of the company's
17 business as or on behalf of a party having an interest
18 adverse to the company; and
19 (3) to refrain from competing with the company in
20 the conduct of the company's business before the
21 dissolution of the company.
22 (c) A member's duty of care to a member-managed company
23 and its other members in the conduct of a winding up of the
24 company's business is limited to refraining from engaging in
25 grossly negligent or reckless conduct, intentional
26 misconduct, or a knowing violation of law.
27 (d) A member shall discharge his or her duties to a
28 member-managed company and its other members under this Act
29 or under the operating agreement and exercise any rights
30 consistent with the obligation of good faith and fair
31 dealing.
32 (e) A member of a member-managed company does not
33 violate a duty or obligation under this Act or under the
34 operating agreement merely because the member's conduct
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1 furthers the member's own interest.
2 (f) This Section applies to a person winding up the
3 limited liability company's business as the personal or legal
4 representative of the last surviving member as if the person
5 were a member.
6 (g) In a manager-managed company:
7 (1) a member who is not also a manager owes no
8 duties to the company or to the other members solely by
9 reason of being a member;
10 (2) a manager is held to the same standards of
11 conduct prescribed for members in subsections (b), (c),
12 (d), and (e) of this Section;
13 (3) a member who pursuant to the operating
14 agreement exercises some or all of the authority of a
15 manager in the management and conduct of the company's
16 business is held to the standards of conduct in
17 subsections (b), (c), (d), and (e) of this Section to the
18 extent that the member exercises the managerial authority
19 vested in a manager by this Act; and
20 (4) a manager is relieved of liability imposed by
21 law for violations of the standards prescribed by
22 subsections (b), (c), (d), and (e) to the extent of the
23 managerial authority delegated to the members by the
24 operating agreement.
25 (805 ILCS 180/15-5)
26 Sec. 15-5. Operating agreement.
27 (a) Except as otherwise provided in subsection (b) of
28 this Section, all members of a limited liability company may
29 enter into an operating agreement to regulate the affairs of
30 the company and the conduct of its business and to govern
31 relations among the members, managers, and company. To the
32 extent the operating agreement does not otherwise provide,
33 this Act governs relations among the members, managers, and
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1 company.
2 (b) The operating agreement may not:
3 (1) unreasonably restrict a right to information or
4 access to records under Section 10-15;
5 (2) vary the right to expel a member in an event
6 specified in subdivision (6) of Section 35-45;
7 (3) vary the requirement to wind up the limited
8 liability company's business in a case specified in
9 subdivisions (3) or (4) of Section 35-1;
10 (4) restrict rights of a person, other than a
11 manager, member, and transferee of a member's
12 distributional interest, under this Act;
13 (5) restrict the power of a member to dissociate
14 under Section 35-50, although an operating agreement may
15 restrict the right of a member to dissociate and it may
16 restrict or modify the obligation of the limited
17 liability company to purchase the dissociated member's
18 interest under Section 35-60;
19 (6) eliminate or reduce a member's fiduciary
20 duties, but may;
21 (A) identify specific types or categories of
22 activities that do not violate these duties, if not
23 manifestly unreasonable; and
24 (B) specify the number or percentage of
25 members or disinterested managers that may authorize
26 or ratify, after full disclosure of all materials
27 facts, a specific act or transaction that otherwise
28 would violate these duties; or
29 (7) eliminate or reduce the obligation of good
30 faith and fair dealing under subsection (d) of Section
31 15-3, but the operating agreement may determine the
32 standards by which the performance of the obligation is
33 to be measured, if the standards are not manifestly
34 unreasonable.
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1 (c) In a limited liability company with only one member,
2 the operating agreement includes any of the following:
3 (1) Any writing, without regard to whether the
4 writing otherwise constitutes an agreement, as to the
5 company's affairs signed by the sole member.
6 (2) Any written agreement between the member and
7 the company as to the company's affairs.
8 (3) Any agreement, which need not be in writing,
9 between the member and the company as to a company's
10 affairs, provided that the company is managed by a
11 manager who is a person other than the member. The power
12 to adopt, alter, amend, or repeal the operating agreement
13 of a limited liability company shall be vested in the
14 members of the company unless vested in the manager or
15 managers of the company by the articles of organization.
16 A new operating agreement may be adopted by the members
17 unless prohibited by the articles of organization. The
18 operating agreement may contain any provisions for the
19 regulation and management of the affairs of the limited
20 liability company not inconsistent with law or the
21 articles of organization.
22 (Source: P.A. 87-1062.)
23 (805 ILCS 180/15-7 new)
24 Sec. 15-7. Member and manager's right to payments and
25 reimbursement.
26 (a) A limited liability company shall reimburse a member
27 or manager for payments made and indemnify a member or
28 manager for liabilities incurred by the member or manager in
29 the ordinary course of the business of the company or for the
30 preservation of its business or property.
31 (b) A limited liability company shall reimburse a member
32 for an advance to the company beyond the amount of
33 contribution the member agreed to make.
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1 (c) A payment or advance made by a member that gives
2 rise to an obligation of a limited liability company under
3 subsection (a) or (b) of this Section constitutes a loan to
4 the company upon which interest accrues from the date of the
5 payment or advance.
6 (d) A member is not entitled to remuneration for
7 services performed for a limited liability company, except
8 for reasonable compensation for services rendered in winding
9 up the business of the company.
10 (805 ILCS 180/15-20 new)
11 Sec. 15-20. Actions by members.
12 (a) A member may maintain an action against a limited
13 liability company or another member for legal or equitable
14 relief, with or without an accounting as to the company's
15 business, to enforce all of the following:
16 (1) The member's rights under the operating
17 agreement.
18 (2) The member's rights under this Act.
19 (3) The rights and otherwise protect the interests
20 of the member, including rights and interests arising
21 independently of the member's relationship to the
22 company.
23 (b) The accrual, and any time limited for the assertion,
24 of a right of action for a remedy under this Section is
25 governed by other law. A right to an accounting upon a
26 dissolution and winding up does not revive a claim barred by
27 law.
28 (805 ILCS 180/20-5)
29 Sec. 20-5. Member's liability for contributions.
30 (a) (Blank). A promise by a member to contribute to the
31 limited liability company is not enforceable unless set out
32 in a writing signed by the member.
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1 (b) (Blank). Except as provided in the operating
2 agreement or in the articles of organization, a member is
3 obligated to the limited liability company to perform any
4 enforceable promise to contribute cash or property or to
5 perform services, even if the member is unable to perform
6 because of death, disability, or any other reason. If a
7 member does not make the member's required contribution of
8 property or services, the member is obligated, at the option
9 of the limited liability company, to contribute cash equal to
10 that portion of the value, as stated in the limited liability
11 company records required to be kept by Section 1-40, of the
12 contribution that has not been made.
13 (c) A member's obligation to contribute money, property,
14 or other benefit to, or to perform services for, a limited
15 liability company is not excused by the member's death,
16 disability, or other inability to perform personally. If a
17 member does not make the required contribution of property or
18 services, the member is obligated at the option of the
19 company to contribute money equal to the value of that
20 portion of the stated contribution which has not been made.
21 (d) A creditor of a limited liability company who
22 extends credit or otherwise acts in reliance on an obligation
23 described in subsection (c), and without notice of any
24 compromise under subdivision (4) of subsection (c) of Section
25 15-1, may enforce the original obligation.
26 (Source: P.A. 87-1062.)
27 (805 ILCS 180/Art. 25 heading)
28 ARTICLE 25. Distributions and Resignation
29 (805 ILCS 180/25-1)
30 Sec. 25-1. Interim distributions.
31 (a) Any distributions made by a limited liability
32 company before its dissolution and winding up must be in
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1 equal shares.
2 (b) A member has no right to receive, and may not be
3 required to accept, a distribution in kind. Except as
4 provided in this Article or Article 35, a member is entitled
5 to receive distributions from a limited liability company at
6 the times or upon the happening of the events specified in
7 the articles of organization or operating agreement or as the
8 manager or managers shall specify or, if there are no
9 managers, as the members shall specify pursuant to action
10 properly taken pursuant to Section 10-5.
11 (Source: P.A. 87-1062.)
12 (805 ILCS 180/25-30 new)
13 Sec. 25-30. Limitations on distributions.
14 (a) A distribution may not be made if:
15 (1) the limited liability company would not be able
16 to pay its debts as they become due in the ordinary
17 course of business; or
18 (2) the company's total assets would be less than
19 the sum of its total liabilities plus the amount that
20 would be needed, if the company were to be dissolved,
21 wound up, and terminated at the time of the distribution,
22 to satisfy the preferential rights upon dissolution,
23 winding up, and termination of members whose preferential
24 rights are superior to those receiving the distribution.
25 (b) A limited liability company may base a determination
26 that a distribution is not prohibited under subsection (a) of
27 this Section on financial statements prepared on the basis of
28 accounting practices and principles that are reasonable in
29 the circumstances or on a fair valuation or other method that
30 is reasonable in the circumstances.
31 (c) Except as otherwise provided in subsection (e) of
32 this Section, the effect of a distribution under subsection
33 (a) of this Section is measured:
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1 (1) in the case of distribution by purchase,
2 redemption, or other acquisition of a distributional
3 interest in a limited liability company, as of the date
4 money or other property is transferred or debt incurred
5 by the company; and
6 (2) in all other cases, as of the date the:
7 (A) distribution is authorized if the payment
8 occurs within 120 days after the date of
9 authorization; or
10 (B) payment is made if it occurs more than 120
11 days after the date of authorization.
12 (d) A limited liability company's indebtedness to a
13 member incurred by reason of a distribution made in
14 accordance with this Section is at parity with the company's
15 indebtedness to its general, unsecured creditors.
16 (e) Indebtedness of a limited liability company,
17 including indebtedness issued in connection with or as part
18 of a distribution, is not considered a liability for purposes
19 of determinations under subsection (a) of this Section if its
20 terms provide that payment of principal and interest are made
21 only if and to the extent that payment of a distribution to
22 members could then be made under this Section. If the
23 indebtedness is issued as a distribution, each payment of
24 principal or interest on the indebtedness is treated as a
25 distribution, the effect of which is measured on the date the
26 payment is made.
27 (805 ILCS 180/25-35 new)
28 Sec. 25-35. Liability for unlawful distributions.
29 (a) A member of a member-managed company or a member or
30 manager of a manager-managed company who votes for or assents
31 to a distribution made in violation of Section 25-30, the
32 articles of organization, or the operating agreement is
33 personally liable to the company for the amount of the
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1 distribution that exceeds the amount that could have been
2 distributed without violating Section 25-30, the articles of
3 organization, or the operating agreement if it is established
4 that the member or manager did not perform the member or
5 manager's duties in compliance with Section 15-3.
6 (b) A member of a manager-managed company who knew a
7 distribution was made in violation of Section 25-30, the
8 articles of organization, or the operating agreement is
9 personally liable to the company, but only to the extent that
10 the distribution received by the member exceeded the amount
11 that could have been properly paid under Section 25-30.
12 (c) A member or manager against whom an action is
13 brought under this Section may implead in the action:
14 (1) all other members or managers who voted for or
15 assented to the distribution in violation of subsection
16 (a) of this Section and may compel contribution from
17 them; and
18 (2) all members who received a distribution in
19 violation of subsection (b) of this Section and may
20 compel contribution from the member in the amount
21 received in violation of subsection (b) of this Section.
22 (d) A proceeding under this Section is barred unless it
23 is commenced within 2 years after the distribution.
24 (805 ILCS 180/25-45 new)
25 Sec. 25-45. Known claims against dissolved limited
26 liability company.
27 (a) A dissolved limited liability company may dispose of
28 the known claims against it by following the procedure
29 described in this Section.
30 (b) A dissolved limited liability company shall notify
31 its known claimants in writing of the dissolution. The
32 notice must:
33 (1) specify the information required to be included
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1 in a claim;
2 (2) provide a mailing address where the claim is to
3 be sent;
4 (3) state the deadline for receipt of the claim,
5 which may not be less than 120 days after the date the
6 written notice is received by the claimant; and
7 (4) state that the claim will be barred if not
8 received by the deadline.
9 (c) A claim against a dissolved limited liability
10 company is barred if the requirements of subsection (b) of
11 this Section are met, and:
12 (1) the claim is not received by the specified
13 deadline; or
14 (2) in the case of a claim that is timely received
15 but rejected by the dissolved company, the claimant does
16 not commence a proceeding to enforce the claim within 90
17 days after the receipt of the notice of the rejection.
18 (d) For purposes of this Section, the term "claim" does
19 not include a contingent liability or a claim based on an
20 event occurring after the effective date of dissolution.
21 (805 ILCS 180/25-50 new)
22 Sec. 25-50. Other claims against dissolved limited
23 liability company.
24 (a) A dissolved limited liability company may publish
25 notice of its dissolution and request persons having claims
26 against the company to present them in accordance with the
27 notice.
28 (b) The notice must:
29 (1) be published at least once in a newspaper of
30 general circulation in the county in which the dissolved
31 limited liability company's principal office is located
32 or, if none in this State, in which its designated office
33 is or was last located;
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1 (2) describe the information required to be
2 contained in a claim and provide a mailing address where
3 the claim is to be sent; and
4 (3) state that a claim against the limited
5 liability company is barred unless a proceeding to
6 enforce the claim is commenced within 5 years after
7 publication of the notice.
8 (c) If a dissolved limited liability company publishes a
9 notice in accordance with subsection (b) of this Section, the
10 claim of each of the following claimants is barred unless the
11 claimant commences a proceeding to enforce the claim against
12 the dissolved company within 5 years after the publication
13 date of the notice:
14 (1) a claimant who did not receive written notice
15 under Section 25-45;
16 (2) a claimant whose claim was timely sent to the
17 dissolved company but not acted on; and
18 (3) a claimant whose claim is contingent or based
19 on an event occurring after the effective date of
20 dissolution.
21 (d) A claim not barred under this Section may be
22 enforced:
23 (1) against the dissolved limited liability
24 company, to the extent of its undistributed assets; or
25 (2) if the assets have been distributed in
26 liquidation, against a member of the dissolved company to
27 the extent of the member's proportionate share of the
28 claim or the company's assets distributed to the member
29 in liquidation, whichever is less, but a member's total
30 liability for all claims under this Section may not
31 exceed the total amount of assets distributed to the
32 member.
33 (805 ILCS 180/30-1)
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1 Sec. 30-1. Member's distributional Nature of membership
2 interest.
3 (a) A member is not a co-owner of, and has no
4 transferable interest in, property of a limited liability
5 company.
6 (b) A distributional interest in a limited liability
7 company is personal property and, subject to Sections 30-5
8 and 30-10, may be transferred in whole or in part.
9 (c) An operating agreement may provide that a
10 distributional interest may be evidenced by a certificate of
11 the interest issued by the limited liability company and,
12 subject to Section 30-10, may also provide for the transfer
13 of any interest represented by the certificate. The interest
14 of each member in a limited liability company is personal
15 property.
16 (Source: P.A. 87-1062.)
17 (805 ILCS 180/30-5)
18 Sec. 30-5. Transfer of a distributional Assignment of
19 membership interest. A transfer of a distributional interest
20 does not entitle the transferee to become or to exercise any
21 rights of a member. A transfer entitles the transferee to
22 receive, to the extent transferred, only the distributions to
23 which the transferor would be entitled. Unless provided
24 otherwise in the articles of organization or the operating
25 agreement, if the members of the limited liability company,
26 other than the member proposing to dispose of the interest,
27 do not approve of the proposed transfer or assignment by
28 unanimous consent, the transferee or assignee of the interest
29 shall have no right to participate in the management of the
30 business and affairs of the limited liability company or to
31 become a member.
32 (Source: P.A. 87-1062.)
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1 (805 ILCS 180/30-10)
2 Sec. 30-10. Rights of a transferee assignee.
3 (a) A transferee of a distributional interest may become
4 a member of a limited liability company if and to the extent
5 that the transferor gives the transferee the right in
6 accordance with authority described in the operating
7 agreement or all other members consent.
8 (b) A transferee who has become a member, to the extent
9 transferred, has the rights and powers, and is subject to the
10 restrictions and liabilities, of a member under the operating
11 agreement of a limited liability company and this Act. A
12 transferee who becomes a member also is liable for the
13 transferor member's obligations to make contributions under
14 Section 20-5 and for obligations under Section 25-35 to
15 return unlawful distributions, but the transferee is not
16 obligated for the transferor member's liabilities unknown to
17 the transferee at the time the transferee becomes a member.
18 (c) Whether or not a transferee of a distributional
19 interest becomes a member under subsection (a) of this
20 Section, the transferor is not released from liability to the
21 limited liability company under the operating agreement or
22 this Act.
23 (d) A transferee who does not become a member is not
24 entitled to participate in the management or conduct of the
25 limited liability company's business, require access to
26 information concerning the company's transactions, or inspect
27 or copy any of the company's records.
28 (e) A transferee who does not become a member is
29 entitled to:
30 (1) receive, in accordance with the transfer,
31 distributions to which the transferor would otherwise be
32 entitled;
33 (2) receive, upon dissolution and winding up of the
34 limited liability company's business:
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1 (A) in accordance with the transfer, the net
2 amount otherwise distributable to the transferor;
3 and
4 (B) a statement of account only from the date
5 of the latest statement of account agreed to by all
6 the members; and
7 (3) seek under subdivision (6) of Section 35-1 a
8 judicial determination that it is equitable to dissolve
9 and wind up the company's business.
10 (f) A limited liability company need not give effect to
11 a transfer until it has notice of the transfer. A transferee
12 or assignee of a membership interest who does not become a
13 substituted member shall be entitled to receive only the
14 share of profits or other compensation by way of income and
15 the return of contributions to which that member otherwise
16 would be entitled.
17 (Source: P.A. 87-1062.)
18 (805 ILCS 180/30-20)
19 Sec. 30-20. Rights of creditor of a member.
20 (a) On application by a judgment creditor of a member of
21 a limited liability company or of a member's transferee, a
22 court having jurisdiction may charge the distributional
23 interest of the judgment debtor to satisfy the judgment. The
24 court may appoint a receiver of the share of the
25 distributions due or to become due to the judgment debtor and
26 make all other orders, directions, accounts, and inquiries
27 the judgment debtor might have made or which the
28 circumstances may require to give effect to the charging
29 order.
30 (b) A charging order constitutes a lien on the judgment
31 debtor's distributional interest. The court may order a
32 foreclosure of a lien on a distributional interest subject to
33 the charging order at any time. A purchaser at the
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1 foreclosure sale has the rights of a transferee.
2 (c) at any time before foreclosure, a distributional
3 interest in a limited liability company that is charged may
4 be redeemed:
5 (1) by the judgment debtor;
6 (2) with property other than the company's
7 property, by one or more of the other members; or
8 (3) with the company's property, but only if
9 permitted by the operating agreement.
10 (d) This Act does not affect a member's right under
11 exemption laws with respect to the member's distributional
12 interest in a limited liability company.
13 (e) This Section provides the exclusive remedy by which
14 a judgment creditor of a member or a transferee may satisfy a
15 judgment out of the judgment debtor's distributional interest
16 in a limited liability company. On application to a court of
17 competent jurisdiction by any judgment creditor of a member,
18 the court may charge the member's share of profits and right
19 to distributions with payment of the unsatisfied amount of
20 the judgment with interest. To the extent so charged, the
21 judgment creditor has only the rights of an assignee. This
22 Article shall not deprive any member of the benefit of any
23 exemption laws applicable to his interest in the limited
24 liability company.
25 (Source: P.A. 87-1062.)
26 (805 ILCS 180/Art. 35 heading)
27 Article 35. Dissolution and Dissociation
28 (805 ILCS 180/35-1)
29 Sec. 35-1. Events causing dissolution and winding up of
30 company's business. A limited liability company is dissolved,
31 and its business must be wound up, upon the occurrence of any
32 of the following events:
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1 (1) An event specified in the operating agreement.
2 (2) Consent of the number or percentage of members
3 specified in the operating agreement.
4 (3) An event that makes it unlawful for all or
5 substantially all of the business of the company to be
6 continued, but any cure of illegality within 90 days after
7 notice to the company of the event is effective retroactively
8 to the date of the event for purposes of this Section.
9 (4) On application by a member or a dissociated member,
10 upon entry of a judicial decree that:
11 (A) the economic purpose of the company is likely
12 to be unreasonably frustrated;
13 (B) another member has engaged in conduct relating
14 to the company's business that makes it not reasonably
15 practicable to carry on the company's business with that
16 member;
17 (C) it is not otherwise reasonably practicable to
18 carry on the company's business in conformity with the
19 articles of organization and the operating agreement;
20 (D) the company failed to purchase the petitioner's
21 distributional interest as required by Section 35-60; or
22 (E) the managers or members in control of the
23 company have acted, are acting, or will act in a manner
24 that is illegal, oppressive, or fraudulent with respect
25 to the petitioner.
26 (5) On application by a transferee of a member's
27 interest, a judicial determination that it is equitable to
28 wind up the company's business.
29 (6) Administrative dissolution under Section 35-25. A
30 limited liability company organized under this Act shall be
31 dissolved and its affairs shall be wound up upon the
32 happening of the first to occur of any of the following
33 events:
34 (1) At the time or upon the happening of events
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1 specified in the articles of organization.
2 (2) Upon the agreement of the members, which shall be in
3 writing and, unless otherwise provided in the articles of
4 organization, unanimous.
5 (3) Unless provided otherwise in the articles of
6 organization or the operating agreement, upon the death,
7 retirement, resignation, bankruptcy, court declaration of
8 incompetence with respect to, or dissolution of, a member or
9 upon the occurrence of any other event that terminates the
10 continued membership of a member in the limited liability
11 company, unless within 90 days after the event there are at
12 least 2 remaining members and all the remaining members agree
13 to continue the business of the limited liability company.
14 (4) Entry of a decree of judicial dissolution under
15 Section 35-5.
16 (5) Administrative dissolution under Section 35-25.
17 (Source: P.A. 87-1062.)
18 (805 ILCS 180/35-3 new)
19 Sec. 35-3. Limited liability company continues after
20 dissolution.
21 (a) Subject to subsection (b) of this Section, a limited
22 liability company continues after dissolution only for the
23 purpose of winding up its business.
24 (b) At any time after the dissolution of a limited
25 liability company and before the winding up of its business
26 is completed, the members, including a dissociated member
27 whose dissociation caused the dissolution, may unanimously
28 waive the right to have the company's business wound up and
29 the company terminated. In that case:
30 (1) the limited liability company resumes carrying
31 on its business as if dissolution had never occurred and
32 any liability incurred by the company or a member after
33 the dissolution and before the waiver is determined as if
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1 the dissolution had never occurred; and
2 (2) the rights of a third party accruing under
3 subsection (a) of Section 35-7 or arising out of conduct
4 in reliance on the dissolution before the third party
5 knew or received a notification of the waiver are not
6 adversely affected.
7 (805 ILCS 180/35-4 new)
8 Sec. 35-4. Right to wind up limited liability company's
9 business.
10 (a) After dissolution, a member who has not wrongfully
11 dissociated may participate in winding up a limited liability
12 company's business, but on application of any member,
13 member's legal representative, or transferee, the Circuit
14 Court, for good cause shown, may order judicial supervision
15 of the winding up.
16 (b) A legal representative of the last surviving member
17 may wind up a limited liability company's business.
18 (c) A person winding up a limited liability company's
19 business may preserve the company's business or property as a
20 going concern for a reasonable time, prosecute and defend
21 actions and proceedings, whether civil, criminal, or
22 administrative, settle and close the company's business,
23 dispose of and transfer the company's property, discharge the
24 company's liabilities, distribute the assets of the company
25 pursuant to Section 35-10, settle disputes by mediation or
26 arbitration, and perform other necessary acts.
27 (805 ILCS 180/35-7 new)
28 Sec. 35-7. Member or manager's power and liability as
29 agent after dissolution.
30 (a) A limited liability company is bound by a member or
31 manager's act after dissolution that:
32 (1) is appropriate for winding up the company's
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1 business; or
2 (2) would have bound the company under Section 13-5
3 before dissolution, if the other party to the transaction
4 did not have notice of the dissolution.
5 (b) A member or manager who, with knowledge of the
6 dissolution, subjects a limited liability company to
7 liability by an act that is not appropriate for winding up
8 the company's business is liable to the company for any
9 damage caused to the company arising from the liability.
10 (805 ILCS 180/35-10)
11 Sec. 35-10. Distribution of assets in winding up limited
12 liability company's business upon dissolution.
13 (a) In winding up a limited liability company's
14 business, the assets of the company must be applied to
15 discharge its obligations to creditors, including members who
16 are creditors. Any surplus must be applied to pay in money
17 the net amount distributable to members in accordance with
18 their right to distributions under subsection (b) of this
19 Section.
20 (b) Each member is entitled to a distribution upon the
21 winding up of the limited liability company's business,
22 consisting of a return of all contributions that have not
23 previously been returned and a distribution of any remainder
24 in equal shares. Upon the winding up of a limited liability
25 company, the assets shall be distributed in the following
26 order:
27 (1) to creditors, including members who are creditors,
28 to the extent permitted by law, in satisfaction of
29 liabilities of the limited liability company other than
30 liabilities for distributions to members under Section 25-1
31 or 25-10;
32 (2) except as provided in the operating agreement or in
33 the articles of organization, to members and former members
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1 of the limited liability company in satisfaction of the
2 limited liability company's obligations for distributions due
3 and owing under Section 25-1 or 25-10;
4 (3) except as provided in the operating agreement or in
5 the articles of organization, to members of the limited
6 liability company for the return of their contributions; and
7 (4) except as provided in the operating agreement or in
8 the articles of organization, to the members of the limited
9 liability company in the proportions in which the members
10 share in distributions under Section 20-15.
11 (Source: P.A. 87-1062.)
12 (805 ILCS 180/35-20)
13 Sec. 35-20. Filing of articles of dissolution.
14 (a) Duplicate originals of the articles of dissolution
15 shall be delivered to the Secretary of State. If the
16 Secretary of State finds that the articles of dissolution
17 conform to law, he or she shall, when all required fees have
18 been paid:
19 (1) endorse on each duplicate original the word
20 "Filed" and the date of the filing thereof; and
21 (2) file one duplicate original in his or her
22 office.
23 (b) A duplicate original of the articles of dissolution
24 shall be returned to the representative of the dissolved
25 limited liability company. Upon the filing of the articles
26 of dissolution, the existence of the company shall cease, and
27 its articles of organization shall be deemed cancelled,
28 except for the purpose of suits, other proceedings, and
29 appropriate action as provided in this Article. The manager
30 or managers at the time of dissolution, or those that remain,
31 shall thereafter be trustee trustees for the members and
32 creditors of the dissolved limited liability company and, in
33 that capacity, shall have authority to convey or distribute
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1 any company property discovered after dissolution and take
2 any other action that may be necessary on behalf of and in
3 the name of the dissolved limited liability company.
4 (Source: P.A. 87-1062.)
5 (805 ILCS 180/35-30)
6 Sec. 35-30. Procedure for administrative dissolution.
7 (a) After the Secretary of State determines that one or
8 more grounds exist under Section 35-25 for the administrative
9 dissolution of a limited liability company, the Secretary of
10 State shall send a notice of delinquency by regular mail to
11 each delinquent limited liability company at its registered
12 office, or if the limited liability company has failed to
13 maintain a registered office, to the member or manager at the
14 last known office of the member or manager.
15 (b) If the limited liability company does not correct
16 the default within 90 days following the date of the notice
17 of delinquency, the Secretary of State shall thereupon
18 dissolve the limited liability company by issuing a notice of
19 dissolution that recites the grounds for dissolution and its
20 effective date. The Secretary of State shall file the
21 original of the notice in his or her office and mail one copy
22 to the limited liability company at its registered office.
23 (c) Upon the administrative dissolution of a limited
24 liability company, terminates its business existence, and a
25 dissolved limited liability company shall continue for only
26 the purpose of winding up its business. not thereafter carry
27 on any business. However, A dissolved limited liability
28 company may take all action authorized under Section 1-30 or
29 necessary to wind up and liquidate its business and affairs
30 and terminate.
31 (Source: P.A. 87-1062.)
32 (805 ILCS 180/35-45 new)
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1 Sec. 35-45. Events causing member's dissociation. A
2 member is dissociated from a limited liability company upon
3 the occurrence of any of the following events:
4 (1) The company's having notice of the member's express
5 will to withdraw upon the date of notice or on a later date
6 specified by the member.
7 (2) An event agreed to in the operating agreement as
8 causing the member's dissociation.
9 (3) Upon transfer of all of a member's distributional
10 interest, other than a transfer for security purposes or a
11 court order charging the member's distributional interest
12 that has not been foreclosed.
13 (4) The member's expulsion pursuant to the operating
14 agreement.
15 (5) The member's expulsion by unanimous vote of the
16 other members if:
17 (A) it is unlawful to carry on the company's
18 business with the member;
19 (B) there has been a transfer of substantially all
20 of the member's distributional interest, other than a
21 transfer for security purposes or a court order charging
22 the member's distributional interest that has not been
23 foreclosed;
24 (C) within 90 days after the company notifies a
25 corporate member that it will be expelled because it has
26 filed a certificate of dissolution or the equivalent, its
27 charter has been revoked, or its right to conduct
28 business has been suspended by the jurisdiction of its
29 incorporation, the member fails to obtain a revocation of
30 the certificate of dissolution or a reinstatement of its
31 charter or its right to conduct business; or
32 (D) a partnership or a limited liability company
33 that is a member has been dissolved and its business is
34 being wound up.
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1 (6) On application by the company or another member, the
2 member's expulsion by judicial determination because the
3 member:
4 (A) engaged in wrongful conduct that adversely and
5 materially affected the company's business;
6 (B) willfully or persistently committed a material
7 breach of the operating agreement or of a duty owed to the
8 company or the other members under Section 15-3; or
9 (C) engaged in conduct relating to the company's
10 business that makes it not reasonably practicable to carry on
11 the business with the member.
12 (7) The member's:
13 (A) becoming a debtor in bankruptcy;
14 (B) executing an assignment for the benefit of
15 creditors;
16 (C) seeking, consenting to, or acquiescing in the
17 appointment of a trustee, receiver, or liquidator of the
18 member or of all or substantially all of the member's
19 property; or
20 (D) failing, within 90 days after the appointment,
21 to have vacated or stayed the appointment of a trustee,
22 receiver, or liquidator of the member or of all or
23 substantially all of the member's property obtained
24 without the member's consent or acquiescence, or failing
25 within 90 days after the expiration of a stay to have the
26 appointment vacated.
27 (8) In the case of a member who is an individual:
28 (A) the member's death;
29 (B) the appointment of a guardian or general
30 conservator for the member; or
31 (C) a judicial determination that the member has
32 otherwise become incapable of performing the member's
33 duties under the operating agreement.
34 (9) In the case of a member that is a trust or is acting
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1 as a member by virtue of being a trustee of a trust,
2 distribution of the trust's entire rights to receive
3 distributions from the company, but not merely by reason of
4 the substitution of a successor trustee.
5 (10) In the case of a member that is an estate or is
6 acting as a member by virtue of being a personal
7 representative of an estate, distribution of the estate's
8 entire rights to receive distributions from the company, but
9 not merely the substitution of a successor personal
10 representative.
11 (11) Termination of the existence of a member if the
12 member is not an individual, estate, or trust other than a
13 business trust.
14 (805 ILCS 180/35-50 new)
15 Sec. 35-50. Member's power to dissociate; wrongful
16 dissociation.
17 (a) A member has the power to dissociate from a limited
18 liability company at any time, rightfully or wrongfully, by
19 express will under subdivision (1) of Section 35-45.
20 (b) The member's dissociation from a limited liability
21 company is wrongful only if it is in breach of an express
22 provision of the agreement.
23 (c) A member who wrongfully dissociates from a limited
24 liability company is liable to the company and to the other
25 members for damages caused by the dissociation. The
26 liability is in addition to any other obligation of the
27 member to the company or to the other members.
28 (d) If a limited liability company does not dissolve and
29 wind up its business as a result of a member's wrongful
30 dissociation under subsection (b) of this Section, damages
31 sustained by the company for the wrongful dissociation must
32 be offset against distributions otherwise due the member
33 after the dissociation.
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1 (805 ILCS 180/35-55 new)
2 Sec. 35-55. Effect of member's dissociation.
3 (a) Upon a member's dissociation the company must cause
4 the dissociated member's distributional interest to be
5 purchased under Section 35-60.
6 (b) Upon a member's dissociation from a limited
7 liability company:
8 (1) the member's right to participate in the
9 management and conduct of the company's business
10 terminates, except as otherwise provided in Section 35-4,
11 and the member ceases to be a member and is treated the
12 same as a transferee of a member;
13 (2) the member's duty of loyalty under subdivision
14 (3) of subsection (b) of Section 15-3 terminates; and
15 (3) the member's duty of loyalty under subdivisions
16 (1) and (2) of subsection (b) of Section 15-3 and duty of
17 care under subsection (c) of Section 15-3 continue only
18 with regard to matters arising and events occurring
19 before the member's dissociation, unless the member
20 participates in winding up the company's business
21 pursuant to Section 35-4.
22 (805 ILCS 180/35-60 new)
23 Sec. 35-60. Company purchase of distributional interest.
24 (a) A limited liability company shall purchase a
25 distributional interest of a member for its fair value
26 determined as of the date of the member's dissociation if the
27 member's dissociation does not result in a dissolution and
28 winding up of the company's business under Section 35-1.
29 (b) A limited liability company must deliver a purchase
30 offer to the dissociated member whose distributional interest
31 is entitled to be purchased not later than 30 days after the
32 date determined under subsection (a) of this Section. The
33 purchase offer must be accompanied by:
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1 (1) a statement of the company's assets and
2 liabilities as of the date determined under subsection
3 (a) of this Section;
4 (2) the latest available balance sheet and income
5 statement, if any; and
6 (3) an explanation of how the estimated amount of
7 the payment was calculated.
8 (c) If the price and other terms of a purchase of a
9 distributional interest are fixed or are to be determined by
10 the operating agreement, the price and terms so fixed or
11 determined govern the purchase unless the purchaser defaults.
12 If a default occurs, the dissociated member is entitled to
13 commence a proceeding to have the company dissolved under
14 Section 35-1.
15 (d) If an agreement to purchase the distributional
16 interest is not made within 120 days after the date
17 determined under subsection (a) of this Section, the
18 dissociated member, within another 120 days, may commence a
19 proceeding against the limited liability company to enforce
20 the purchase. The company at its expense shall notify in
21 writing all of the remaining members, and any other person
22 the court directs, of the commencement of the proceeding.
23 The jurisdiction of the court in which the proceeding is
24 commenced under this subsection (d) is plenary and exclusive.
25 (e) The court shall determine the fair value of the
26 distributional interest in accordance with the standards set
27 forth in Section 35-65 together with the terms for the
28 purchase. Upon making these determinations, the court shall
29 order the limited liability company to purchase or cause the
30 purchase of the interest.
31 (f) Damages for wrongful dissociation under Section
32 35-50, and all other amounts owing, whether or not currently
33 due, from the dissociated member to a limited liability
34 company, must be offset against the purchase price.
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1 (805 ILCS 180/35-65 new)
2 Sec. 35-65. Court action to determine fair value of
3 distributional interest.
4 (a) In an action brought to determine the fair value of
5 a distributional interest in a limited liability company, the
6 court shall:
7 (1) determine the fair value of the interest,
8 considering among other relevant evidence the going
9 concern value of the company, any agreement among some or
10 all of the members fixing the price or specifying a
11 formula for determining value of distributional interests
12 for any other purpose, the recommendations of any
13 appraiser appointed by the court, and any legal
14 constraints on the company's ability to purchase the
15 interest;
16 (2) specify the terms of the purchase, including,
17 if appropriate, terms for installment payments,
18 subordination of the purchase obligation to the rights of
19 the company's other creditors, security for a deferred
20 purchase price, and a covenant not to compete or other
21 restriction on a dissociated member; and
22 (3) require the dissociated member to deliver an
23 assignment of the interest to the purchaser upon receipt
24 of the purchase price or the first installment of the
25 purchase price.
26 (b) After the dissociated member delivers the
27 assignment, the dissociated member has no further claim
28 against the company, its members, officers, or managers, if
29 any, other than a claim to any unpaid balance of the purchase
30 price and a claim under any agreement with the company or the
31 remaining members that is not terminated by the court.
32 (c) If the purchase is not completed in accordance with
33 the specified terms, the company shall be dissolved upon
34 application under item (D) of subdivision (4) of Section
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1 35-1. If a limited liability company is so dissolved, the
2 dissociated member has the same rights and priorities in the
3 company's assets as if the sale had not been ordered.
4 (d) If the court finds that a party to the proceeding
5 acted arbitrarily, vexatiously, or not in good faith, it may
6 award one or more other parties their reasonable expenses,
7 including attorney's fees and the expenses of appraisers or
8 other experts, incurred in the proceeding. The finding may
9 be based on the company's failure to make an offer to pay or
10 to comply with Section 35-60.
11 (e) Interest must be paid on the amount awarded from the
12 date determined under subsection (a) of Section 35-60 to the
13 date of payment.
14 (805 ILCS 180/35-70 new)
15 Sec. 35-70. Dissociated member's power to bind limited
16 liability company. For 2 years after a member dissociates
17 without the dissociation resulting in a dissolution and
18 winding up of a limited liability company's business, the
19 company, including a surviving company under Article 37, is
20 bound by an act of the dissociated member that would have
21 bound the company under Section 13-5 before dissociation only
22 if at the time of entering into the transaction the other
23 party:
24 (1) reasonably believed that the dissociated member was
25 then a member;
26 (2) did not have notice of the member's dissociation;
27 and
28 (3) is not deemed to have had notice under Section
29 35-15.
30 (805 ILCS 180/Art. 37 heading new)
31 Article 37. Conversions and mergers
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1 (805 ILCS 180/37-5 new)
2 Sec. 37-5. Definitions. In this Article:
3 "Corporation" means a corporation under the Business
4 Corporation Act of 1983, a predecessor law, or comparable law
5 of another jurisdiction.
6 "General partner" means a partner in a partnership and a
7 general partner in a limited partnership.
8 "Limited partner" means a limited partner in a limited
9 partnership.
10 "Limited partnership" means a limited partnership created
11 under the Revised Uniform Limited Partnership Act, a
12 predecessor law, or comparable law of another jurisdiction.
13 "Partner" includes a general partner and a limited
14 partner.
15 "Partnership" means a general partnership under the
16 Uniform Partnership Act, a predecessor law, or comparable law
17 of another jurisdiction.
18 "Partnership agreement" means an agreement among the
19 partners concerning the partnership or limited partnership.
20 "Shareholder" means a shareholder in a corporation.
21 (805 ILCS 180/37-10 new)
22 Sec. 37-10. Conversion of partnership or limited
23 partnership to limited liability company.
24 (a) A partnership or limited partnership may be
25 converted to a limited liability company pursuant to this
26 Section if conversion to a limited liability company is
27 permitted under the law governing the partnership or limited
28 partnership.
29 (b) The terms and conditions of a conversion of a
30 partnership or limited partnership to a limited liability
31 company must be approved by all of the partners or by a
32 number or percentage of the partners required for conversion
33 in the partnership agreement.
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1 (c) An agreement of conversion must set forth the terms
2 and conditions of the conversion of the interests of partners
3 of a partnership or of a limited partnership, as the case may
4 be, into interests in the converted limited liability company
5 or the cash or other consideration to be paid or delivered as
6 a result of the conversion of the interests of the partners,
7 or a combination thereof.
8 (d) After a conversion is approved under subsection (b)
9 of this Section, the partnership or limited partnership shall
10 file articles of organization in the office of the Secretary
11 of State that satisfy the requirements of Section 5-5 and
12 contain all of the following:
13 (1) A statement that the partnership or limited
14 partnership was converted to a limited liability company
15 from a partnership or limited partnership, as the case
16 may be.
17 (2) Its former name.
18 (3) A statement of the number of votes cast by the
19 partners entitled to vote for and against the conversion
20 and, if the vote is less than unanimous, the number or
21 percentage required to approve the conversion under
22 subsection (b) of this Section.
23 (4) In the case of a limited partnership, a
24 statement that the certificate of limited partnership
25 shall be canceled as of the date the conversion took
26 effect.
27 (e) In the case of a limited partnership, the filing of
28 articles of organization under subsection (d) of this Section
29 cancels its certificate of limited partnership as of the date
30 the conversion took effect.
31 (f) A conversion takes effect when the articles of
32 organization are filed in the office of the Secretary of
33 State or on a date specified in the articles of organization
34 not later than 30 days subsequent to the filing of the
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1 articles of organization.
2 (g) A general partner who becomes a member of a limited
3 liability company as a result of a conversion remains liable
4 as a partner for an obligation incurred by the partnership or
5 limited partnership before the conversion takes effect.
6 (h) A general partner's liability for all obligations of
7 the limited liability company incurred after the conversion
8 takes effect is that of a member of the company. A limited
9 partner who becomes a member as a result of a conversion
10 remains liable only to the extent the limited partner was
11 liable for an obligation incurred by the limited partnership
12 before the conversion takes effect.
13 (805 ILCS 180/37-15 new)
14 Sec. 37-15. Effect of conversion; entity unchanged.
15 (a) A partnership or limited partnership that has been
16 converted under this Article is for all purposes the same
17 entity that existed before the conversion.
18 (b) When a conversion takes effect:
19 (1) all property owned by the converting
20 partnership or limited partnership vests in the limited
21 liability company;
22 (2) all debts, liabilities, and other obligations
23 of the converting partnership or limited partnership
24 continue as obligations of the limited liability company;
25 (3) an action or proceeding pending by or against
26 the converting partnership or limited partnership may be
27 continued as if the conversion had not occurred;
28 (4) except as prohibited by other law, all of the
29 rights, privileges, immunities, powers, and purposes of
30 the converting partnership or limited partnership vest in
31 the limited liability company; and
32 (5) except as otherwise provided in the agreement
33 of conversion under Section 37-10, all of the partners of
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1 the converting partnership continue as members of the
2 limited liability company.
3 (805 ILCS 180/37-20 new)
4 Sec. 37-20. Merger of entities.
5 (a) Pursuant to a plan of merger approved under
6 subsection (c) of this Section, a limited liability company
7 may be merged with or into one or more limited liability
8 companies, foreign limited liability companies, corporations,
9 foreign corporations, partnerships, foreign partnerships,
10 limited partnerships, foreign limited partnerships, or other
11 domestic or foreign entities if merger with or into a limited
12 liability company is permitted under the law governing the
13 domestic or foreign entity.
14 (b) A plan of merger must set forth all of the
15 following:
16 (1) The name of each entity that is a party to the
17 merger.
18 (2) The name of the surviving entity into which the
19 other entities will merge.
20 (3) The type of organization of the surviving
21 entity.
22 (4) The terms and conditions of the merger.
23 (5) The manner and basis for converting the
24 interests, shares, obligations, or other securities of
25 each party to the merger into interests, shares,
26 obligations, or other securities of the surviving entity,
27 or into money or other property in whole or in part.
28 (6) The street address of the surviving entity's
29 principal place of business.
30 (c) A plan of merger must be approved:
31 (1) in the case of a limited liability company that
32 is a party to the merger, by all of the members or by a
33 number or percentage of members specified in the
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1 operating agreement;
2 (2) in the case of a foreign limited liability
3 company that is a party to the merger, by the vote
4 required for approval of a merger by the law of the state
5 or foreign jurisdiction in which the foreign limited
6 liability company is organized;
7 (3) in the case of a partnership or domestic
8 limited partnership that is a party to the merger, by the
9 vote required for approval of a conversion under Section
10 37-5(b); and
11 (4) in the case of any other entities that are
12 parties to the merger, by the vote required for approval
13 of a merger by the law of this State or of the State or
14 foreign jurisdiction in which the entity is organized
15 and, in the absence of such a requirement, by all the
16 owners of interests in the entity.
17 (d) After a plan of merger is approved and before the
18 merger takes effect, the plan may be amended or abandoned as
19 provided in the plan.
20 (e) The merger is effective upon the filing of the
21 articles of merger with the Secretary of State, or a later
22 date as specified in the articles of merger not later than 30
23 days subsequent to the filing of the plan of merger under
24 Section 37-25.
25 (805 ILCS 180/37-25 new)
26 Sec. 37-25. Articles of merger.
27 (a) After approval of the plan of merger under Section
28 37-20, unless the merger is abandoned under subsection (d) of
29 Section 37-20, articles of merger must be signed on behalf of
30 each limited liability company and other entity that is a
31 party to the merger and delivered to the Secretary of State
32 for filing. The articles must set forth all of the
33 following:
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1 (1) The name and jurisdiction of formation or
2 organization of each of the limited liability companies
3 and other entities that are parties to the merger.
4 (2) For each limited liability company that is to
5 merge, the date its articles of organization were filed
6 with the Secretary of State.
7 (3) That a plan of merger has been approved and
8 signed by each limited liability company and other entity
9 that is to merge and, if a corporation is a party to the
10 merger, a copy of the plan as approved by the corporation
11 shall be attached to the articles.
12 (4) The name and address of the surviving limited
13 liability company or other surviving entity.
14 (5) The effective date of the merger.
15 (6) If a limited liability company is the surviving
16 entity, any changes in its articles of organization that
17 are necessary by reason of the merger.
18 (7) If a party to a merger is a foreign limited
19 liability company, the jurisdiction and date of filing of
20 its initial articles of organization and the date when
21 its application for authority was filed by the Secretary
22 of State or, if an application has not been filed, a
23 statement to that effect.
24 (8) If the surviving entity is not a limited
25 liability company, an agreement that the surviving entity
26 may be served with process in this State and is subject
27 to liability in any action or proceeding for the
28 enforcement of any liability or obligation of any limited
29 liability company previously subject to suit in this
30 State which is to merge, and for the enforcement, as
31 provided in this Act, of the right of members of any
32 limited liability company to receive payment for their
33 interest against the surviving entity.
34 (b) If a foreign limited liability company is the
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1 surviving entity of a merger, it may not do business in this
2 State until an application for that authority is filed with
3 the Secretary of State.
4 (c) The surviving limited liability company or other
5 entity shall furnish a copy of the plan of merger, on request
6 and without cost, to any member of any limited liability
7 company or any person holding an interest in any other entity
8 that is to merge.
9 (d) To the extent the articles of merger are
10 inconsistent with the limited liability company's articles of
11 organization, the articles of merger shall operate as an
12 amendment to the company's articles of organization.
13 (805 ILCS 180/37-30 new)
14 Sec. 37-30. Effect of merger.
15 (a) When a merger takes effect:
16 (1) the separate existence of each limited
17 liability company and other entity that is a party to the
18 merger, other than the surviving entity, terminates;
19 (2) all property owned by each of the limited
20 liability companies and other entities that are party to
21 the merger vests in the surviving entity;
22 (3) all debts, liabilities, and other obligations
23 of each limited liability company and other entity that
24 is party to the merger become the obligations of the
25 surviving entity;
26 (4) an action or proceeding pending by or against a
27 limited liability company or other party to a merger may
28 be continued as if the merger had not occurred or the
29 surviving entity may be substituted as a party to the
30 action or proceeding; and
31 (5) except as prohibited by other law, all the
32 rights, privileges, immunities, powers, and purposes of
33 every limited liability company and other entity that is
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1 a party to a merger vest in the surviving entity.
2 (b) The Secretary of State is an agent for service of
3 process in an action or proceeding against the surviving
4 foreign entity to enforce an obligation of any party to a
5 merger if the surviving foreign entity fails to appoint or
6 maintain an agent designated for service of process in this
7 State or the agent for service of process cannot with
8 reasonable diligence be found at the designated office.
9 Service is effected under this subsection (b) at the earliest
10 of:
11 (1) the date the company receives the process,
12 notice, or demand;
13 (2) the date shown on the return receipt, if signed
14 on behalf of the company; or
15 (3) 5 days after its deposit in the mail, if mailed
16 postpaid and correctly addressed.
17 (c) Service under subsection (b) of this Section shall
18 be made by the person instituting the action by doing all of
19 the following:
20 (1) Serving on the Secretary of State, or on any
21 employee having responsibility for administering this
22 Act, a copy of the process, notice, or demand, together
23 with any papers required by law to be delivered in
24 connection with service and paying the fee prescribed by
25 Article 50 of this Act.
26 (2) Transmitting notice of the service on the
27 Secretary of State and a copy of the process, notice, or
28 demand and accompanying papers to the surviving entity
29 being served, by registered or certified mail at the
30 address set forth in the articles of merger.
31 (3) Attaching an affidavit of compliance with this
32 Section, in substantially the form that the Secretary of
33 State may by rule prescribe, to the process, notice, or
34 demand.
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1 (d) Nothing contained in this Section shall limit or
2 affect the right to serve any process, notice, or demand
3 required or permitted by law to be served upon a limited
4 liability company in any other manner now or hereafter
5 permitted by law.
6 (e) A member of the surviving limited liability company
7 is liable for all obligations of a party to the merger for
8 which the member was personally liable before the merger.
9 (f) Unless otherwise agreed, a merger of a limited
10 liability company that is not the surviving entity in the
11 merger does not require the limited liability company to wind
12 up its business under this Act or pay its liabilities and
13 distribute its assets under this Act.
14 (805 ILCS 180/37-35 new)
15 Sec. 37-35. Article not exclusive. This Article does not
16 preclude an entity from being converted or merged under other
17 law.
18 (805 ILCS 180/40-1)
19 Sec. 40-1. Right of action. No action shall be brought
20 by a member, or transferee assignee who is entitled to
21 exercise the rights of a member to bring an action, in the
22 right of a limited liability company to recover a judgment in
23 its favor unless members or managers with authority to do so
24 have refused to bring the action or unless an effort to cause
25 those members or managers to bring the action is not likely
26 to succeed.
27 (Source: P.A. 87-1062.)
28 (805 ILCS 180/40-5)
29 Sec. 40-5. Proper plaintiff. No action shall be brought
30 in the right of a limited liability company by a member or
31 transferee assignee who is a substituted member, unless (i)
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1 the plaintiff was a member or is a transferee an assignee who
2 was a substituted member at the time of the transaction of
3 which the person complains or (ii) the person's status as a
4 member or a transferee an assignee who is a substituted
5 member had devolved upon him or her by operation of law or
6 under the terms of the operating agreement from a person who
7 was a member or a transferee an assignee who was a
8 substituted member at the time of the transaction.
9 (Source: P.A. 87-1062.)
10 (805 ILCS 180/45-1)
11 Sec. 45-1. Law governing foreign limited liability
12 companies.
13 (a) Subject to the Constitution of this State, The laws
14 of the State or other jurisdiction under which a foreign
15 limited liability company is organized shall govern its
16 organization and, internal affairs, and the liability of its
17 managers, members, and their transferees.
18 (b) A foreign limited liability company may not be
19 denied admission by reason of any difference between the
20 those laws of another jurisdiction under which the foreign
21 company is organized and the laws of this State.
22 (c) A certificate of authority does not authorize a
23 foreign limited liability company to engage in any business
24 or exercise any power that a limited liability company may
25 not engage in or exercise in this State.
26 (Source: P.A. 87-1062.)
27 (805 ILCS 180/45-5)
28 Sec. 45-5. Admission to transact business.
29 (a) Before transacting business in this State, a foreign
30 limited liability company shall be admitted to do so by the
31 Secretary of State. In order to be admitted, a foreign
32 limited liability company shall submit to the Office of the
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1 Secretary of State an application for admission to transact
2 business as a foreign limited liability company setting forth
3 all of the following:
4 (1) The name of the foreign limited liability
5 company and, if different, the name under which it
6 proposes to transact business in this State.
7 (2) The jurisdiction, date of its formation, and
8 period of duration.
9 (3) A certificate stating that the company is in
10 existence under the laws of the jurisdiction wherein it
11 is organized executed by the Secretary of State of that
12 jurisdiction or by some other official that may have
13 custody of the records pertaining to limited liability
14 companies (or affidavit from an appropriate official of
15 the jurisdiction that good standing certificates are not
16 issued or other evidence of existence which the Secretary
17 of State shall deem appropriate).
18 (4) The name and business address of the proposed
19 registered agent in this State, which registered agent
20 shall be an individual resident of this State, a domestic
21 corporation, or a foreign corporation having a place of
22 business in, and authorized to do business in, this
23 State; if the registered agent is a corporation, the
24 corporation must be authorized by its articles of
25 incorporation to act as a registered agent.
26 (5) The address of the office required to be
27 maintained in the jurisdiction of its organization by the
28 laws of that jurisdiction or, if not so required, of the
29 principal place of business of the foreign limited
30 liability company.
31 (6) The purpose or purposes for which it was
32 organized and the purpose or purposes which it proposes
33 to conduct in the transaction of business in this State.
34 (7) A statement whether the limited liability
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1 company is managed by a manager or managers or whether
2 management of the limited liability company is vested in
3 the members.
4 (8) (6) A statement that the Secretary of State is
5 appointed the agent of the foreign limited liability
6 company for service of process under the circumstances
7 set forth in subsection (b) of Section 1-50.
8 (9) (7) All additional information that may be
9 necessary or appropriate in order to enable the Secretary
10 of State to determine whether the limited liability
11 company is entitled to transact business in this State.
12 (b) No foreign limited liability company shall transact
13 in this State any business that a limited liability company
14 formed under the laws of this State is not permitted to
15 transact. A foreign limited liability company admitted to
16 transact business in this State shall, until admission is
17 revoked as provided in this Act, enjoy the same, but no
18 greater, rights and privileges as a limited liability company
19 formed under the laws of this State.
20 (c) The acceptance and filing by the Office of the
21 Secretary of State of a foreign limited liability company's
22 application shall admit the foreign limited liability company
23 to transact business in the State.
24 (Source: P.A. 87-1062.)
25 (805 ILCS 180/45-35)
26 Sec. 45-35. Revocation of admission.
27 (a) The admission of a foreign limited liability company
28 to transact business in this State may be revoked by the
29 Secretary of State upon the occurrence of any of the
30 following events:
31 (1) The foreign limited company has failed to:
32 (A) file its limited liability company annual
33 report within the time required by Section 50-1 or
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1 has failed to pay any fees or penalties prescribed
2 by this Article;
3 (B) appoint and maintain a registered agent as
4 required by this Article;
5 (C) file a report upon any change in the name
6 or business address of the registered agent; or
7 (D) file in the Office of the Secretary of
8 State any amendment to its application for admission
9 as specified in Section 45-25; or
10 (E) renew its assumed name, or to apply to
11 change its assumed name under this Act, when the
12 limited liability company may only transact business
13 within this State under its assumed name.
14 (2) A misrepresentation has been made of any
15 material matter in any application, report, affidavit, or
16 other document submitted by the foreign limited liability
17 company under this Article.
18 (b) The admission of a foreign limited liability company
19 shall not be revoked by the Secretary of State unless all of
20 the following occur:
21 (1) The Secretary of State has given the foreign
22 limited liability company not less than 60 days' notice
23 thereof by mail addressed to its registered office in
24 this State or, if the foreign limited liability company
25 fails to appoint and maintain a registered agent in this
26 State, addressed to the office required to be maintained
27 under paragraph (5) of subsection (a) of Section 45-5.
28 (2) During that 60 day period, the foreign limited
29 liability company has failed to file the limited
30 liability company report, to pay fees or penalties, to
31 file a report of change regarding the registered agent,
32 to file any amendment, or to correct any
33 misrepresentation.
34 (c) Upon the expiration of 60 days after the mailing of
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1 the notice, the admission of the foreign limited liability
2 company to transact business in this State shall cease.
3 (Source: P.A. 87-1062.)
4 (805 ILCS 180/45-65 new)
5 Sec. 45-65. Reinstatement following revocation.
6 (a) A limited liability company whose admission has been
7 revoked under Section 45-35 may be reinstated by the
8 Secretary of State within 5 years following the date of
9 issuance of the certificate of revocation upon the occurrence
10 of all of the following:
11 (1) The filing of the application for
12 reinstatement.
13 (2) The filing with the Secretary of State by the
14 limited liability company of all reports then due and
15 becoming due.
16 (3) The payment to the Secretary of State by the
17 limited liability company of all fees and penalties then
18 due and becoming due.
19 (b) The application for reinstatement shall be executed
20 and filed in duplicate in accordance with Section 5-45 and
21 shall set forth all of the following:
22 (1) The name of the limited liability company at
23 the time of the issuance of the notice of revocation.
24 (2) If the name is not available for use as
25 determined by the Secretary of State at the time of
26 filing the application for reinstatement, the name of the
27 limited liability company as changed, provided that any
28 change is properly effected under Sections 1-10 and
29 45-25.
30 (3) The date of the issuance of the notice of
31 revocation.
32 (4) The address, including street and number or
33 rural route number of the registered office of the
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1 limited liability company upon reinstatement and the name
2 of its registered agent at that address upon the
3 reinstatement of the limited liability company, provided
4 that any change from either the registered office or the
5 registered agent at the time of revocation is properly
6 reported under Section 1-35.
7 (c) When a limited liability company whose admission has
8 been revoked has complied with the provisions of this
9 Section, the Secretary of State shall issue a certificate of
10 reinstatement.
11 (d) Upon the issuance of the certificate of
12 reinstatement: (i) the admission of the limited liability
13 company to transact business in this State shall be deemed to
14 have continued without interruption from the date of the
15 issuance of the notice of revocation, (ii) the limited
16 liability company shall stand revived with the powers,
17 duties, and obligations as if its admission had not been
18 revoked, and (iii) all acts and proceedings of its members or
19 managers, acting or purporting to act in that capacity, that
20 would have been legal and valid but for the revocation, shall
21 stand ratified and confirmed.
22 (805 ILCS 180/50-1)
23 Sec. 50-1. Annual reports.
24 (a) Each limited liability company organized under the
25 laws of this State and each foreign limited liability company
26 admitted to transact business in this State shall file,
27 within the time prescribed by this Act, an annual report
28 setting forth all of the following:
29 (1) The name of the limited liability company.
30 (2) The address, including street and number or
31 rural route number, of its registered office in this
32 State and the name of its registered agent at that
33 address and a statement of change of its registered
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1 office or registered agent, or both, if any.
2 (3) The address, including street and number or
3 rural route number of its principal place of business.
4 (4) The names and addresses of its managers or, if
5 none, the members.
6 (5) Additional information that may be necessary or
7 appropriate in order to enable the Secretary of State to
8 administer this Act and to verify the proper amount of
9 fees payable by the limited liability company.
10 (6) The annual report shall be made on forms
11 prescribed and furnished by the Secretary of State, and
12 the information therein, required by paragraphs (1)
13 through (4) of subsection (a), both inclusive, shall be
14 given as of the date of execution of the annual report.
15 The annual report shall be executed by a manager or, if
16 none, a member designated by the members pursuant to
17 limited liability company action properly taken under
18 Section 15-1 10-5.
19 (b) The annual report, together with all fees and
20 charges prescribed by this Act, shall be delivered to the
21 Secretary of State within 60 days immediately preceding the
22 first day of the anniversary month. The annual report,
23 together with all fees and charges as prescribed by this Act,
24 shall be deemed to be received by the Secretary of State upon
25 the date of actual receipt thereof by the Secretary of State.
26 If the Secretary of State finds that the report conforms to
27 the requirements of this Act, he or she shall file it. If
28 the Secretary of State finds that it does not so conform, he
29 or she shall promptly return it to the limited liability
30 company for any necessary corrections, in which event the
31 penalties prescribed for failure to file the report within
32 the time provided shall not apply if the report is corrected
33 to conform to the requirements of this Act and returned to
34 the Secretary of State within 30 days of the date the report
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1 was returned for corrections.
2 (Source: P.A. 87-1062.)
3 (805 ILCS 180/50-10)
4 Sec. 50-10. Fees.
5 (a) The Secretary of State shall charge and collect in
6 accordance with the provisions of this Act and rules
7 promulgated under its authority all of the following:
8 (1) Fees for filing documents.
9 (2) Miscellaneous charges.
10 (3) Fees for the sale of lists of filings, copies
11 of any documents, and for the sale or release of any
12 information.
13 (b) The Secretary of State shall charge and collect for
14 all of the following:
15 (1) Filing articles of organization of limited
16 liability companies (domestic), application for admission
17 (foreign), and restated articles of organization
18 (domestic), $400 $500.
19 (2) Filing amendments:, $100.
20 (A) For other than change of registered agent
21 name or registered office, or both, $100.
22 (B) For the purpose of changing the registered
23 agent name or registered office, or both, $25.
24 (3) Filing articles of dissolution or application
25 for withdrawal, $100.
26 (4) Filing an application to reserve a name, $300.
27 (5) Renewal fee for reserved name, $100.
28 (6) Filing a notice of a transfer of a reserved
29 name, $100.
30 (7) Registration of a name, $300.
31 (8) Renewal of registration of a name, $100.
32 (9) Filing an application for use of an assumed
33 name under Section 1-20 of this Act, $20 plus $5 for each
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1 month or part thereof between the date of filing the
2 application and the date of the renewal of the assumed
3 name; and a renewal for each assumed name, $300.
4 (10) Filing an application for change of an assumed
5 name, $100.
6 (11) Filing an annual report of a limited liability
7 company or foreign limited liability company, $200 $300,
8 if filed as required by this Act, plus a penalty if
9 delinquent.
10 (12) Filing an application for reinstatement of a
11 limited liability company or foreign limited liability
12 company and for issuing a certificate of reinstatement,
13 $500.
14 (13) Filing Articles of Merger, $100 plus $50 for
15 each party to the merger in excess of the first 2
16 parties.
17 (14) Filing an Agreement of Conversion or Statement
18 of Conversion, $100.
19 (15) (13) Filing any other document, $100.
20 (c) The Secretary of State shall charge and collect all
21 of the following:
22 (1) For furnishing a copy or certified copy of any
23 document, instrument, or paper relating to a limited
24 liability company or foreign limited liability company,
25 $1 per page, but not less than $25, and $25 for the
26 certificate and for affixing the seal thereto.
27 (2) For the transfer of information by computer
28 process media to any purchaser, fees established by rule.
29 (Source: P.A. 87-1062.)
30 (805 ILCS 180/50-15)
31 Sec. 50-15. Penalty.
32 (a) The Secretary of State shall declare any limited
33 liability company or foreign limited liability company to be
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1 delinquent and not in good standing if any of the following
2 occur:
3 (1) It has failed to file its annual report and pay
4 the requisite fee as required by this Act before the
5 first day of the anniversary month in the year in which
6 it is due.
7 (2) It has failed to appoint and maintain a
8 registered agent in Illinois within 60 days of
9 notification of the Secretary of State by the resigning
10 registered agent.
11 (3) It has failed to report its federal employer
12 identification number to the Secretary of State within 90
13 days as specified in Section 50-30.
14 (b) If the limited liability company or foreign limited
15 liability company has not corrected the default within the
16 time periods prescribed by this Act, the Secretary of State
17 shall be empowered to invoke any of the following penalties:
18 (1) For failure or refusal to comply with
19 subsection (a) of this Section within 60 days after the
20 due date, a penalty of $100 plus increasing by $50 for
21 each additional month or fraction thereof until returned
22 to good standing or until administratively dissolved by
23 the Secretary of State.
24 (2) The Secretary of State shall not file any
25 additional documents, amendments, reports, or other
26 papers relating to any limited liability company or
27 foreign limited liability company organized under or
28 subject to the provisions of this Act until any
29 delinquency under subsection (a) is satisfied.
30 (3) In response to inquiries received in the Office
31 of the Secretary of State from any party regarding a
32 limited liability company that is delinquent, the
33 Secretary of State may show the limited liability company
34 as not in good standing.
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1 (Source: P.A. 87-1062.)
2 (805 ILCS 180/55-15 new)
3 Sec. 55-15. Transitional provisions.
4 (a) Before January 1, 2000, this amendatory Act of 1997
5 governs only a limited liability company:
6 (1) organized on or after the effective date of
7 this amendatory Act of 1997, unless the company is
8 continuing the business of a dissolved limited liability
9 company under this Act; and
10 (2) organized before the effective date of this
11 amendatory Act of 1997, that elects, as provided under
12 subsection (c) of this Section, to be governed by this
13 amendatory Act of 1997.
14 (b) On and after January 1, 2000, this amendatory Act of
15 1997 governs all limited liability companies.
16 (c) Before January 1, 2000, a limited liability company
17 voluntarily may elect, in the manner provided in its
18 operating agreement or by law for amending the operating
19 agreement, to be governed by this amendatory Act of 1997.
20 (805 ILCS 180/60-1)
21 Sec. 60-1. Effective date. This Act takes effect on
22 January 1, 1994.
23 (Source: P.A. 87-1062.)
24 (805 ILCS 180/1-45 rep.)
25 (805 ILCS 180/5-20 rep.)
26 (805 ILCS 180/10-5 rep.)
27 (805 ILCS 180/20-10 rep.)
28 (805 ILCS 180/20-15 rep.)
29 (805 ILCS 180/25-5 rep.)
30 (805 ILCS 180/25-10 rep.)
31 (805 ILCS 180/25-15 rep.)
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1 (805 ILCS 180/25-25 rep.)
2 (805 ILCS 180/30-15 rep.)
3 (805 ILCS 180/35-5 rep.)
4 (805 ILCS 180/35-35 rep.)
5 Section 13. The Limited Liability Company Act is amended
6 by repealing Sections 1-45, 5-20, 10-5, 20-10, 20-15, 25-5,
7 25-10, 25-15, 25-25, 30-15, 35-5, and 35-35.
8 Section 15. The Uniform Partnership Act is amended by
9 adding Sections 7.1 and 7.2 as follows:
10 (805 ILCS 205/7.1 new)
11 Sec. 7.1. Merger of partnership and limited liability
12 company.
13 (a) Under a plan of merger approved under subsection (c)
14 of this Section, any one or more partnerships of this State
15 may merge with or into one or more limited liability
16 companies of this State, any other state or states of the
17 United States, or the District of Columbia, if the laws of
18 the other state or states or the District of Columbia permit
19 the merger. The partnership or partnerships and the limited
20 liability company or companies may merge with or into a
21 partnership, which may be any one of these partnerships, or
22 they may merge with or into a limited liability company,
23 which may be any one of these limited liability companies,
24 which shall be a partnership or limited liability company of
25 this State, any other state of the United States, or the
26 District of Columbia, which permits the merger.
27 (b) A plan of merger must set forth all of the
28 following:
29 (1) The name of each entity that is a party to the
30 merger.
31 (2) The name of the surviving entity into which the
32 other entities will merge.
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1 (3) The type of organization of the surviving
2 entity.
3 (4) The terms and conditions of the merger.
4 (5) The manner and basis for converting the
5 interests of each party to the merger into interests,
6 obligations, or other securities of the surviving entity,
7 or into money or other property in whole or in part.
8 (6) The street address of the surviving entity's
9 principal place of business.
10 (c) The plan of merger required by subsection (b) of
11 this Section must be approved by each party to the merger in
12 accordance with all of the following:
13 (1) In the case of a partnership, by all of the
14 partners or by the number or percentage of the partners
15 required to approve a merger in the partnership
16 agreement.
17 (2) In the case of a limited liability company, in
18 accordance with the terms of the limited liability
19 company operating agreement, if any, and in accordance
20 with the laws under which it was formed.
21 (d) After a plan of merger is approved and before the
22 merger takes effect, the plan may be amended or abandoned as
23 provided in the plan of merger.
24 (e) If a partnership or partnerships are merging under
25 this Section, the partnership or partnerships and the limited
26 liability company or companies that are parties to the merger
27 must sign the articles of merger. The articles of merger
28 shall be delivered to the Secretary of State of this State
29 for filing. The articles must set forth all of the
30 following:
31 (1) The name of each partnership and the name and
32 jurisdiction of organization of each limited liability
33 company that is a party to the merger.
34 (2) That a plan of merger has been approved and
-83- LRB9003480NTsbam01
1 signed by each partnership and each limited liability
2 company that is a party to the merger.
3 (3) The name and address of the surviving
4 partnership or other surviving entity.
5 (4) The effective date of the merger.
6 (5) If a party to the merger is a foreign limited
7 liability company, the jurisdiction and date of the
8 filing of its articles of organization and the date when
9 its application for authority was filed with the
10 Secretary of State of this State or, if an application
11 has not been filed, a statement to that effect.
12 (6) If the surviving entity is not a partnership or
13 limited liability company organized under the laws of
14 this State, an agreement that the surviving entity may be
15 served with process in this State and is subject to
16 liability in any action or proceeding for the enforcement
17 of any liability or obligation of any partnership
18 previously subject to suit in this State that is to
19 merge, and for the enforcement, as provided in this Act,
20 of the right of partners of any partnership to receive
21 payment for their interest against the surviving entity.
22 (f) The merger is effective upon the filing of the
23 articles of merger with the Secretary of State of this State,
24 or on a later date as specified in the articles of merger not
25 later than 30 days subsequent to the filing of the plan of
26 merger under subsection (e) of this Section.
27 (g) When any merger becomes effective under this
28 Section:
29 (1) the separate existence of each partnership and
30 each limited liability company that is a party to the
31 merger, other than the surviving entity, terminates;
32 (2) all property owned by each partnership and each
33 limited liability company that is a party to the merger
34 vests in the surviving entity;
-84- LRB9003480NTsbam01
1 (3) all debts, liabilities, and other obligations
2 of each partnership and each limited liability company
3 that is a party to the merger become the obligations of
4 the surviving entity;
5 (4) an action or proceeding by or against a
6 partnership or limited liability company that is a party
7 to the merger may be continued as if the merger had not
8 occurred or the surviving entity may be substituted as a
9 party to the action or proceeding; and
10 (5) except as prohibited by other law, all the
11 rights, privileges, immunities, powers, and purposes of
12 each partnership and limited liability company that is a
13 party to the merger vest in the surviving entity.
14 (h) The Secretary of State of this State is an agent for
15 service of process in an action or proceeding against the
16 surviving foreign entity to enforce an obligation of any
17 party to a merger if the surviving foreign entity fails to
18 appoint or maintain an agent designated for service of
19 process in this State or the agent for service of process
20 cannot with reasonable diligence be found at the designated
21 office. Service is effected under this subsection (h) at the
22 earliest of:
23 (1) the date the surviving entity receives the
24 process notice or demand;
25 (2) the date shown on the return receipt, if signed
26 on behalf of the surviving entity; or
27 (3) 5 days after its deposit in the mail, if mailed
28 postpaid and correctly addressed.
29 (i) Service under subsection (h) of this Section shall
30 be made by the person instituting the action by doing all of
31 the following:
32 (1) Serving on the Secretary of State of this
33 State, or on any employee having responsibility for
34 administering this Act in his or her office, a copy of
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1 the process, notice, or demand, together with any papers
2 required by law to be delivered in connection with
3 service and paying the fee prescribed by Section 8.4 of
4 this Act.
5 (2) Transmitting notice of the service on the
6 Secretary of State of this State and a copy of the
7 process, notice, or demand and accompanying papers to the
8 surviving entity being served, by registered or certified
9 mail at the address set forth in the articles of merger.
10 (3) Attaching an affidavit of compliance with this
11 Section, in substantially the form that the Secretary of
12 State of this State may by rule prescribe, to the
13 process, notice, or demand.
14 (j) Nothing contained in this Section shall limit or
15 affect the right to serve any process, notice, or demand
16 required or permitted by law to be served upon a partnership
17 in any other manner now or hereafter permitted by law.
18 (k) The Secretary of State of this State shall keep, for
19 a period of 5 years from the date of service, a record of all
20 processes, notices, and demands served upon him or her under
21 this Section and shall record the time of the service and the
22 person's action with reference to the service.
23 (l) Except as provided by agreement with a person to
24 whom a general partner of a partnership is obligated, a
25 merger of a partnership that has become effective shall not
26 affect any obligation or liability existing at the time of
27 the merger of a general partner of a partnership that is
28 merging.
29 (805 ILCS 205/7.2 new)
30 Sec. 7.2. Approval of conversion into a limited liability
31 company. A partnership may convert into a limited liability
32 company organized, formed, or created under the laws of this
33 State, upon approval of the conversion in accordance with
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1 this Section. If the partnership agreement specifies the
2 manner of approving a conversion of a partnership, the
3 conversion shall be approved as specified in the partnership
4 agreement. If the partnership agreement does not specify the
5 manner of approving a conversion of a partnership and does
6 not prohibit a conversion of the partnership, the conversion
7 shall be approved in the same manner as is specified in the
8 partnership agreement for approving a merger that involves a
9 partnership as a constituent party to the merger. If the
10 partnership agreement does not specify the manner of
11 approving a merger that involves the partnership as a
12 constituent party or a conversion of a partnership and does
13 not prohibit a conversion of the partnership, the conversion
14 must be approved by all of the partners.
15 After a conversion is approved, the partnership shall
16 file articles of organization in the Office of the Secretary
17 of State in accordance with subsection (d) of Section 37-10
18 of the Limited Liability Company Act.
19 Section 20. The Revised Uniform Limited Partnership Act
20 is amended by adding Sections 210 and 211 as follows:
21 (805 ILCS 210/210 new)
22 Sec. 210. Merger of limited partnership and limited
23 liability company.
24 (a) Under a plan of merger approved under subsection (c)
25 of this Section, any one or more limited partnerships may
26 merge with or into one or more limited liability companies of
27 this State, any other state or states of the United States,
28 or the District of Columbia, if the laws of the other state
29 or states or the District of Columbia permit the merger. The
30 limited partnership or partnerships and the limited liability
31 company or companies may merge with or into a limited
32 partnership, which may be any one of these limited
-87- LRB9003480NTsbam01
1 partnerships, or they may merge with or into a limited
2 liability company, which may be any one of these limited
3 liability companies, which shall be a limited partnership or
4 limited liability company of this State, any other state of
5 the United States, or the District of Columbia, which permits
6 the merger.
7 (b) A plan of merger must set forth all of the
8 following:
9 (1) The name of each entity that is a party to the
10 merger.
11 (2) The name of the surviving entity into which the
12 other entities will merge.
13 (3) The type of organization of the surviving
14 entity.
15 (4) The terms and conditions of the merger.
16 (5) The manner and basis for converting the
17 interests, obligations, or other securities of each party
18 to the merger into interests, obligations, or securities
19 of the surviving entity, or into money or other property
20 in whole or in part.
21 (6) The street address of the surviving entity's
22 principal place of business.
23 (c) The plan of merger required by subsection (b) of
24 this Section must be approved by each party to the merger in
25 accordance with all of the following:
26 (1) In the case of a domestic limited partnership,
27 by all of the partners or by the number or percentage of
28 the partners required to approve a merger in the
29 partnership agreement.
30 (2) In the case of a limited liability company, in
31 accordance with the terms of the limited liability
32 company operating agreement, if any, and in accordance
33 with the laws under which it was formed.
34 (d) After a plan of merger is approved and before the
-88- LRB9003480NTsbam01
1 merger takes effect, the plan may be amended or abandoned as
2 provided in the plan of merger.
3 (e) If a limited partnership or partnerships are merging
4 under this Section, the limited partnership or partnerships
5 and the limited liability company or companies that are
6 parties to the merger must sign the articles of merger. The
7 articles of merger shall be delivered to the Secretary of
8 State of this State for filing. The articles must set forth
9 all of the following:
10 (1) The name of each limited partnership and the
11 name and jurisdiction of organization of each limited
12 liability company that is a party to the merger.
13 (2) For each limited partnership that is to merge,
14 the date its certificate of limited partnership was filed
15 with the Secretary of State.
16 (3) That a plan of merger has been approved and
17 signed by each limited partnership and each limited
18 liability company that is a party to the merger.
19 (4) The name and address of the surviving limited
20 partnership or surviving limited liability company.
21 (5) The effective date of the merger.
22 (6) If a limited partnership is the surviving
23 entity, any changes in its certificate of limited
24 partnership that are necessary by reason of the merger.
25 (7) If a party to the merger is a foreign limited
26 liability company, the jurisdiction and date of the
27 filing of its articles of organization and the date when
28 its application for authority was filed with the
29 Secretary of State of this State or, if an application
30 has not been filed, a statement to that effect.
31 (8) If the surviving entity is not a domestic
32 limited partnership or limited liability company
33 organized under the laws of this State, an agreement that
34 the surviving entity may be served with process in this
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1 State and is subject to liability in any action or
2 proceeding for the enforcement of any liability or
3 obligation of any limited partnership previously subject
4 to suit in this State that is to merge, and for the
5 enforcement, as provided in this Act, of the right of
6 partners of any limited partnership to receive payment
7 for their interest against the surviving entity.
8 (f) The merger is effective upon the filing of the
9 articles of merger with the Secretary of State of this State,
10 or on a later date as specified in the articles of merger not
11 later than 30 days subsequent to the filing of the plan of
12 merger under subsection (e) of this Section.
13 (g) Upon the merger becoming effective, articles of
14 merger shall act as a certificate of cancellation for a
15 domestic limited partnership which is not the surviving
16 entity of the merger.
17 (h) Upon the merger becoming effective, articles of
18 merger may operate as an amendment to the certificate of
19 limited partnership of the limited partnership which is the
20 surviving entity of the merger.
21 (i) When any merger becomes effective under this
22 Section:
23 (1) the separate existence of each limited
24 partnership and each limited liability company that is a
25 party to the merger, other than the surviving entity,
26 terminates;
27 (2) all property owned by each limited partnership
28 and each limited liability company that is a party to the
29 merger vests in the surviving entity;
30 (3) all debts, liabilities, and other obligations
31 of each limited partnership and each limited liability
32 company that is a party to the merger become the
33 obligations of the surviving entity;
34 (4) an action or proceeding by or against a limited
-90- LRB9003480NTsbam01
1 partnership or limited liability company that is a party
2 to the merger may be continued as if the merger had not
3 occurred or the surviving entity may be substituted as a
4 party to the action or proceeding; and
5 (5) except as prohibited by other law, all the
6 rights, privileges, immunities, powers, and purposes of
7 each limited partnership and each limited liability
8 company that is a party to the merger vest in the
9 surviving entity.
10 (j) The Secretary of State of this State is an agent for
11 service of process in an action or proceeding against the
12 surviving foreign entity to enforce an obligation of any
13 party to a merger if the surviving foreign entity fails to
14 appoint or maintain an agent designated for service of
15 process in this State or the agent for service of process
16 cannot with reasonable diligence be found at the designated
17 office. Service is effected under this subsection (j) at the
18 earliest of:
19 (1) the date the surviving entity receives the
20 process, notice, or demand;
21 (2) the date shown on the return receipt, if signed
22 on behalf of the surviving entity; or
23 (3) 5 days after its deposit in the mail, if mailed
24 postpaid and correctly addressed.
25 (k) Service under subsection (j) of this Section shall
26 be made by the person instituting the action by doing all of
27 the following:
28 (1) Serving on the Secretary of State of this
29 State, or on any employee having responsibility for
30 administering this Act in his or her office, a copy of
31 the process, notice, or demand, together with any papers
32 required by law to be delivered in connection with
33 service and paying the fee prescribed by subsection (b)
34 of Section 1102 of this Act.
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1 (2) Transmitting notice of the service on the
2 Secretary of State of this State and a copy of the
3 process, notice, or demand and accompanying papers to the
4 surviving entity being served, by registered or certified
5 mail at the address set forth in the articles of merger.
6 (3) Attaching an affidavit of compliance with this
7 Section, in substantially the form that the Secretary of
8 State of this State may by rule prescribe, to the
9 process, notice, or demand.
10 (l) Nothing contained in this Section shall limit or
11 affect the right to serve any process, notice, or demand
12 required or permitted by law to be served upon a limited
13 partnership in any other manner now or hereafter permitted by
14 law.
15 (m) The Secretary of State of this State shall keep, for
16 a period of 5 years from the date of service, a record of all
17 processes, notices, and demands served upon him or her under
18 this Section and shall record the time of the service and the
19 person's action with reference to the service.
20 (n) Except as provided by agreement with a person to
21 whom a general partner of a limited partnership is obligated,
22 a merger of a limited partnership that has become effective
23 shall not affect any obligation or liability existing at the
24 time of the merger of a general partner of a limited
25 partnership that is merging.
26 (o) If a limited partnership is a constituent party to a
27 merger that has become effective, but the limited partnership
28 is not the surviving entity of the merger, then a judgment
29 creditor of a general partner of the limited partnership may
30 not levy execution against the assets of the general partner
31 to satisfy a judgment based on a claim against the surviving
32 entity of the merger unless:
33 (1) a judgment based on the same claim has been
34 obtained against the surviving entity of the merger and a
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1 writ of execution on the judgment has been returned
2 unsatisfied in whole or in part;
3 (2) the surviving entity of the merger is a debtor
4 in bankruptcy;
5 (3) the general partner has agreed that the
6 creditor need not exhaust the assets of the limited
7 partnership that was not the surviving entity of the
8 merger;
9 (4) the general partner has agreed that the
10 creditor need not exhaust the assets of the surviving
11 entity of the merger;
12 (5) a court grants permission to the judgment
13 creditor to levy execution against the assets of the
14 general partner based on a finding that the assets of the
15 surviving entity of the merger that are subject to
16 execution are insufficient to satisfy the judgment, that
17 exhaustion of the assets of the surviving entity of the
18 merger is excessively burdensome, or that grant of
19 permission is an appropriate exercise of the court's
20 equitable powers; or
21 (6) liability is imposed on the general partner by
22 law or contract independent of the existence of the
23 surviving entity of the merger.
24 (805 ILCS 210/211 new)
25 Sec. 211. Approval of conversion into a limited
26 liability company. A limited partnership may convert into a
27 limited liability company organized, formed, or created under
28 the laws of this State, upon approval of the conversion in
29 accordance with this Section. If the partnership agreement
30 specifies the manner of approving a conversion of a limited
31 partnership, the conversion shall be approved as specified in
32 the partnership agreement. If the partnership agreement does
33 not specify the manner of approving a conversion of a limited
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1 partnership and does not prohibit a conversion of the limited
2 partnership, the conversion shall be approved in the same
3 manner as is specified in the partnership agreement for
4 approving a merger that involves a limited partnership as a
5 constituent party to the merger. If the partnership
6 agreement does not specify the manner of approving a merger
7 that involves the limited partnership as a constituent party
8 or a conversion of a limited partnership and does not
9 prohibit a conversion of the limited partnership, the
10 conversion must be approved by all of the partners.
11 After a conversion is approved, the limited partnership
12 shall file articles of organization in the Office of the
13 Secretary of State in accordance with subsection (d) of
14 Section 37-10 of the Limited Liability Company Act.
15 Section 99. Effective date. This Act takes effect on
16 January 1, 1998.".