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| 1 | AN ACT concerning business.
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| 2 | Be it enacted by the People of the State of Illinois,
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| 3 | represented in the General Assembly:
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| 4 | Section 5. The Limited Liability Company Act is amended by | ||||||
| 5 | changing Section 1-26 as follows: | ||||||
| 6 | (805 ILCS 180/1-26)
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| 7 | Sec. 1-26. Low-profit limited liability company. | ||||||
| 8 | (a) A low-profit limited liability company shall at all | ||||||
| 9 | times significantly further the accomplishment of one or more | ||||||
| 10 | charitable, religious, scientific, literary, or educational | ||||||
| 11 | purposes, the purpose of fostering national or international | ||||||
| 12 | amateur sports competition (but only if no part of its | ||||||
| 13 | activities involve the provision of athletic facilities or | ||||||
| 14 | equipment), or the purpose of prevention of cruelty to children | ||||||
| 15 | or animals, within the meaning of Section 170(c)(2)(B) of the | ||||||
| 16 | Internal Revenue Code of 1986, 26 U.S.C. 170(c)(2)(B), or its | ||||||
| 17 | successor, and would not have been formed but for the | ||||||
| 18 | relationship to the accomplishment of such charitable or | ||||||
| 19 | educational purposes. | ||||||
| 20 | (b) A limited liability company which intends to qualify as | ||||||
| 21 | a low-profit limited liability company pursuant to the | ||||||
| 22 | provisions of this Section shall so indicate in its articles of | ||||||
| 23 | organization, 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 | ||||||
| 13 | this Section 1-26 continues to exist as a limited liability | ||||||
| 14 | company and shall promptly amend its articles of organization | ||||||
| 15 | so that its name and purpose no longer identify it as a | ||||||
| 16 | low-profit limited liability company or L3C. | ||||||
| 17 | (d) Any company operating or holding itself out as a | ||||||
| 18 | low-profit limited liability company in Illinois, any company | ||||||
| 19 | formed as a low-profit limited liability company under this | ||||||
| 20 | Act, and any chief operating officer, director, or manager of | ||||||
| 21 | any such company is a "trustee" as defined in Section 3 of the
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| 22 | Charitable Trust Act. | ||||||
| 23 | (e) Nothing in this Section 1-26 prevents a limited | ||||||
| 24 | liability company that is not organized under it from electing | ||||||
| 25 | a charitable or educational purpose set forth in subsection (a) | ||||||
| 26 | in 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.)
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