SB2359 EngrossedLRB098 06641 JLS 40781 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Limited Liability Company Act is amended by
5changing Section 1-26 as follows:
 
6    (805 ILCS 180/1-26)
7    Sec. 1-26. Low-profit limited liability company.
8    (a) A low-profit limited liability company shall at all
9times significantly further the accomplishment of one or more
10charitable, religious, scientific, literary, or educational
11purposes, the purpose of fostering national or international
12amateur sports competition (but only if no part of its
13activities involve the provision of athletic facilities or
14equipment), or the purpose of prevention of cruelty to children
15or animals, within the meaning of Section 170(c)(2)(B) of the
16Internal Revenue Code of 1986, 26 U.S.C. 170(c)(2)(B), or its
17successor, and would not have been formed but for the
18relationship to the accomplishment of such charitable or
19educational purposes.
20    (b) A limited liability company which intends to qualify as
21a low-profit limited liability company pursuant to the
22provisions of this Section shall so indicate in its articles of
23organization, and further state that:

 

 

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1        (1) no significant purpose of the company is the
2    production of income or the appreciation of property;
3    however, the fact that a person produces significant income
4    or capital appreciation shall not, in the absence of other
5    factors, be conclusive evidence of a significant purpose
6    involving the production of income or the appreciation of
7    property; and
8        (2) no purpose of the company is to accomplish one or
9    more political or legislative purposes within the meaning
10    of Section 170(c)(2)(D) of the Internal Revenue Code of
11    1986, 26 U.S.C. 170(c)(2)(D), or its successor.
12    (c) A company that no longer satisfies the requirements of
13this Section 1-26 continues to exist as a limited liability
14company and shall promptly amend its articles of organization
15so that its name and purpose no longer identify it as a
16low-profit limited liability company or L3C.
17    (d) Any company operating or holding itself out as a
18low-profit limited liability company in Illinois, any company
19formed as a low-profit limited liability company under this
20Act, and any chief operating officer, director, or manager of
21any such company is a "trustee" as defined in Section 3 of the
22Charitable Trust Act.
23    (e) Nothing in this Section 1-26 prevents a limited
24liability company that is not organized under it from electing
25a charitable or educational purpose set forth in subsection (a)
26in whole or in part for doing business under this Act.

 

 

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1(Source: P.A. 96-126, eff. 1-1-10; 96-1000, eff. 7-2-10.)