96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB1336


 
Introduced 2/18/2009, by Rep. JoAnn D. Osmond
 
SYNOPSIS AS INTRODUCED:
 		














805 ILCS 180/15-3









    Amends the Limited Liability Corporation Act. Provides that in a manager-managed company a member is held to specified standards of conduct to the extent that the member exercises the
managerial authority vested in a manager by this Act (rather than a member who pursuant to the operating agreement exercises some or all of the authority of a manager in the management and conduct of the company's business is held to specified standards of conduct to the extent that the member exercises the
managerial authority vested in a manager by this Act). 
















LRB096 10290 KTG 20460 b

















 


 


A BILL FOR









 











HB1336

LRB096 10290 KTG 20460 b






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    AN ACT concerning business.

 
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    Be it enacted by the People of the State of Illinois,
 
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represented in the General Assembly:


 
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    Section 5. The Limited Liability Company Act is amended  by 
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changing Section 15-3 as follows:
 



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    (805 ILCS 180/15-3)



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    Sec. 15-3. General standards of member and manager's 
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conduct. 

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    (a) The fiduciary duties a member owes to a member-managed 
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company and its
other members include the duty of loyalty and 
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the duty of care referred to in
subsections (b) and (c) of this 
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Section.

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    (b) A member's duty of loyalty to a member-managed company 
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and its other
members includes the following:


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        (1) to account to the company and to hold as trustee 
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    for it any property,
profit, or benefit derived by the 
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    member in the conduct or winding up of the
company's 
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    business or derived from a use by the member of the 
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    company's
property, including the appropriation of a 
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    company's opportunity;


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        (2) to act fairly when a member deals with the company 
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    in the conduct or
winding up of the company's business as 
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    or on behalf of a party having an
interest adverse to the 
 


 






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    company; and


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        (3) to refrain from competing with the company in the 
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    conduct of the
company's business before the dissolution of 
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    the company.

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    (c) A member's duty of care to a member-managed company and 
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its other
members in the conduct of and winding up of the 
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company's business is limited to
refraining from engaging in 
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grossly negligent or reckless conduct, intentional
misconduct, 
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or a knowing violation of law.

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    (d) A member shall discharge his or her duties to a 
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member-managed company
and its other members under this Act or 
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under the operating agreement and
exercise any rights 
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consistent with the obligation of good faith and fair
dealing.

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    (e) A member of a member-managed company does not violate a 
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duty or
obligation under this Act or under the operating 
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agreement merely because the
member's conduct furthers the 
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member's own interest.

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    (f) This Section applies to a person winding up the limited 
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liability
company's business as the personal or legal 
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representative of the last
surviving member as if the person 
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were a member.

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    (g) In a manager-managed company:


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        (1) a member who is not also a manager owes no duties 
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    to the company or to
the other members solely by reason of 
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    being a member;


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        (2) a manager is held to the same standards of conduct 
 


 






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    prescribed for
members in subsections (b), (c), (d), and 
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    (e) of this Section;


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        (3) a member who pursuant to the operating agreement 
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    exercises some or all
of the authority of a manager in the 
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    management and conduct of the company's
business is held to 
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    the standards of conduct in subsections (b),
(c), (d), and 
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    (e) of this Section to the extent that the member exercises 
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    the
managerial authority vested in a manager by this Act; 
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    and


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        (4) a manager is relieved of liability imposed by law 
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    for violations of
the
standards prescribed by subsections

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    (b), (c), (d), and (e) to the extent of the managerial 
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    authority delegated to
the members by the operating 
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    agreement.

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(Source: P.A. 95-331, eff. 8-21-07.)