HB5674ham001 98TH GENERAL ASSEMBLY

Rep. Michael J. Zalewski

Filed: 3/24/2014

09800HB5674ham001 LRB098 16200 ZMM 57389 a

AMENDMENT TO HOUSE BILL 5674

AMENDMENT NO. ______. Amend House Bill 5674 as follows:

on page 31, immediately below line 12, by inserting the following:

"Section 5. The Limited Liability Company Act is amended by changing Sections 1-10, 1-25, 1-28, 5-5, and 5-55 and by adding Section 1-29 as follows:

(805 ILCS 180/1-10)

Sec. 1-10. Limited liability company name.

(a) The name of each limited liability company as set forth in its articles of organization:

(1) shall contain the terms "limited liability company", "L.L.C.", or "LLC", or, if organized as a low-profit limited liability company under Section 1-26 of this Act, shall contain the term "L3C";

(2) may not contain a word or phrase, or an abbreviation or derivation thereof, the use of which is prohibited or restricted by any other statute of this State unless the restriction has been complied with;

(3) shall consist of letters of the English alphabet, Arabic or Roman numerals, or symbols capable of being readily reproduced by the Office of the Secretary of State;

(4) shall not contain any of the following terms: "Corporation," "Corp.," "Incorporated," "Inc.," "Ltd.," "Co.," "Limited Partnership" or "L.P.";

(5) shall be the name under which the limited liability company transacts business in this State unless the limited liability company also elects to adopt an assumed name or names as provided in this Act; provided, however, that the limited liability company may use any divisional designation or trade name without complying with the requirements of this Act, provided the limited liability company also clearly discloses its name;

(6) shall not contain any word or phrase that indicates or implies that the limited liability company is authorized or empowered to be in the business of a corporate fiduciary unless otherwise permitted by the Secretary of Financial and Professional Regulation Commissioner of the Office of Banks and Real Estate under Section 1-9 of the Corporate Fiduciary Act. The word "trust", "trustee", or "fiduciary" may be used by a limited liability company only if it has first complied with Section 1-9 of the Corporate Fiduciary Act; and

(7) shall contain the word "trust", if it is a limited liability company organized for the purpose of accepting and executing trusts; and

(8) shall not, as to any limited liability company organized or amending its company name on or after April 3, 2009 (the effective date of Public Act 96-7), without the express written consent of the United States Olympic Committee, contain the words: (i) "Olympic"; (ii) "Olympiad"; (iii) "Paralympic"; (iv) "Paralympiad"; (v) "Citius Altius Fortius"; (vi) "CHICOG"; or (vii) "Chicago 2016".

(b) Nothing in this Section or Section 1-20 shall abrogate or limit the common law or statutory law of unfair competition or unfair trade practices, nor derogate from the common law or principles of equity or the statutes of this State or of the United States of America with respect to the right to acquire and protect copyrights, trade names, trademarks, service marks, service names, or any other right to the exclusive use of names or symbols.

(c) (Blank).

(d) The name shall be distinguishable upon the records in the Office of the Secretary of State from all of the following:

(1) Any limited liability company that has articles of organization filed with the Secretary of State under Section 5-5.

(2) Any foreign limited liability company admitted to transact business in this State.

(3) Any name for which an exclusive right has been reserved in the Office of the Secretary of State under Section 1-15.

(4) Any assumed name that is registered with the Secretary of State under Section 1-20.

(5) Any corporate name or assumed corporate name of a domestic or foreign corporation subject to the provisions of Section 4.05 of the Business Corporation Act of 1983 or Section 104.05 of the General Not For Profit Corporation Act of 1986.

(e) The provisions of subsection (d) of this Section shall not apply if the organizer files with the Secretary of State a certified copy of a final decree of a court of competent jurisdiction establishing the prior right of the applicant to the use of that name in this State.

(f) The Secretary of State shall determine whether a name is "distinguishable" from another name for the purposes of this Act. Without excluding other names that may not constitute distinguishable names in this State, a name is not considered distinguishable, for purposes of this Act, solely because it contains one or more of the following:

(1) The word "limited", "liability" or "company" or an abbreviation of one of those words.

(2) Articles, conjunctions, contractions, abbreviations, or different tenses or number of the same word.

(Source: P.A. 96-7, eff. 4-3-09; 96-126, eff. 1-1-10; 96-1000, eff. 7-2-10.)

(805 ILCS 180/1-25)

Sec. 1-25. Nature of business. A limited liability company may be formed for any lawful purpose or business except:

(1) (blank);

(2) insurance unless, for the purpose of carrying on business as a member of a group including incorporated and individual unincorporated underwriters, the Director of Insurance finds that the group meets the requirements of subsection (3) of Section 86 of the Illinois Insurance Code and the limited liability company, if insolvent, is subject to liquidation by the Director of Insurance under Article XIII of the Illinois Insurance Code;

(3) the practice of dentistry unless all the members and managers are licensed as dentists under the Illinois Dental Practice Act; or

(4) the practice of medicine unless all the managers, if any, are licensed to practice medicine under the Medical Practice Act of 1987 and each member is either:

(A) licensed to practice medicine under the Medical Practice Act of 1987; or

(B) a registered medical corporation or corporations organized pursuant to the Medical Corporation Act; or

(C) a professional corporation organized pursuant to the Professional Service Corporation Act of physicians licensed to practice under the Medical Practice Act of 1987; or

(D) a limited liability company that satisfies the requirements of subparagraph (A), (B), or (C); or .

(5) the practice of real estate unless all the managers, if any, or every member in a member-managed company are licensed to practice as a managing broker or broker pursuant to the Real Estate License Act of 2000.

(Source: P.A. 95-331, eff. 8-21-07; 95-738, eff. 1-1-09.)

(805 ILCS 180/1-28)

Sec. 1-28. Certificate of Registration; Department of Financial and Professional Regulation. This Section applies only to a limited liability company that intends to provide, or does provide, professional services that require the individuals engaged in the profession to be licensed by the Department of Financial and Professional Regulation. A limited liability company covered by this Section shall not open, operate, or maintain an establishment for any of the purposes for which a limited liability company may be organized under this Act without obtaining a certificate of registration from the Department.

Application for such registration shall be made in writing and shall contain the name and address of the limited liability company and such other information as may be required by the Department. Upon receipt of such application, the Department shall make an investigation of the limited liability company. If the Department finds that the organizers, managers, and members are each licensed pursuant to the laws of Illinois to engage in the particular profession or related professions involved (except that an initial organizer may be a licensed attorney) and if no disciplinary action is pending before the Department against any of them and if it appears that the limited liability company will be conducted in compliance with the law and the rules and regulations of the Department, the Department shall issue, upon payment of a registration fee of $50, a certificate of registration.

A separate application shall be submitted for each business location in Illinois. If the limited liability company is using more than one fictitious or assumed name and has an address different from that of the parent company, a separate application shall be submitted for each fictitious or assumed name.

Upon written application of the holder, the Department shall renew the certificate if it finds that the limited liability company has complied with its regulations and the provisions of this Act and the applicable licensing Act. This fee for the renewal of a certificate of registration shall be calculated at the rate of $40 per year. The certificate of registration shall be conspicuously posted upon the premises to which it is applicable, and the limited liability company shall have only those offices which are designated by street address in the articles of organization, or as changed by amendment of such articles. A certificate of registration shall not be assignable.

A limited liability company registered under this Section may, for the purposes of dissolution, have as its managers and members individuals who are not licensed by the Department to provide professional services, provided that the limited liability company does not render any professional services or hold itself out as capable or available to render any professional services during the period of dissolution. The Department shall not issue or renew any certificate of registration to a limited liability company during the period of dissolution. A copy of the certificate of dissolution, as issued by the Secretary of State, shall be delivered to the Department within 30 days after its receipt by the managers or members.

All fees, civil penalties, and fines collected under this Section and Section 1-29 shall be deposited into the General Professions Dedicated Fund.

(Source: P.A. 96-679, eff. 8-25-09; 96-984, eff. 1-1-11; 96-1000, eff. 7-2-10.)

(805 ILCS 180/1-29 new)

Sec. 1-29. Certificate of registration; administration and enforcement.

This Section applies to a limited liability company subject to Section 1-28 of this Act.

No limited liability company organized under this Act may render professional services that require the issuance of a license by the Department, except through its managers, members, agents, or employees who are duly licensed or otherwise legally authorized to render such professional services within this State.

Nothing contained in this Act shall be interpreted to abolish, repeal, modify, restrict, or limit the law in effect in this State on the effective date of this amendatory Act of the 98th General Assembly that is applicable to the professional relationship and liabilities between the person furnishing the professional services and the person receiving such professional services or the law that is applicable to the standards for professional conduct. Any manager, member, agent, or employee of a limited liability company shall remain personally and fully liable and accountable for any negligent or wrongful acts or misconduct committed by him or her or by any person under his or her direct supervision and control while rendering professional services on behalf of the limited liability company. However, a limited liability company subject to Section 1-28 shall have no greater liability for the conduct of its agents than any other limited liability company organized under this Act. The limited liability company shall be liable up to the full value of its property for any negligence or wrongful acts or misconduct committed by any of its managers, members, agents, or employees while they are engaged in the rendering of professional services on behalf of the limited liability company.

An individual's association with a limited liability company as a manager, member, agent, or employee, shall in no way modify or diminish the jurisdiction of the Department that licensed, certified, or registered the individual for a particular profession.

All rights and obligations pertaining to communications made to or information received by any qualified person or the advice he or she gives on such communications or information, shall be extended to the limited liability company of which he or she is a manager, member, agent, or employee, and to the limited liability company's managers, members, agents, and employees.

Any limited liability company that, on 2 occasions, issues or delivers a check or other order to the Department that is not honored by the financial institution upon which it is drawn because of insufficient funds on the account, shall pay to the Department, in addition to the amount owing upon such check or other order, a fee of $50. If such check or other order was issued or delivered in payment of a renewal fee and the limited liability company whose certification of registration has lapsed continues to practice as a limited liability company without paying the renewal fee and the $50 fee required under this Section, an additional fee of $100 shall be imposed for practicing without a current license. The Department shall notify the limited liability company whose certificate of registration has lapsed within 30 days after the discovery by the Department that such limited liability company is operating without a current certificate of the fact that the limited liability company is operating without a certificate and of the amount due to the Department, which shall include the lapsed renewal fee and all other fees required by this Section. If the limited liability company whose certification has lapsed seeks a current certificate more than 30 days after the date it receives notification from the Department, it shall be required to apply to the Department for reinstatement of the certificate and to pay all fees due to the Department. The Department may establish a fee for the processing of an application for reinstatement of a certificate that allows the Department to pay all costs and expenses related to the processing of the application. The Director may waive the fees due under this Section in individual cases where he or she finds that in the particular case such fees would be unreasonable or unnecessarily burdensome.

The Department may suspend, revoke, or otherwise discipline the certificate of registration for any of the following reasons:

(1) the revocation or suspension of the license to practice the profession of any officer, manager, member, agent, or employee not promptly removed or discharged by the limited liability company;

(2) unethical professional conduct on the part of any officer, manager, member, agent, or employee not promptly removed or discharged by the limited liability company;

(3) the death of the last remaining member;

(4) upon finding that the holder of the certificate has failed to comply with the provisions of this Act or the regulations prescribed by the Department; or

(5) the failure to file a return, to pay the tax, penalty, or interest shown in a filed return, or to pay any final assessment of tax, penalty, or interest, as required by a tax Act administered by the Illinois Department of Revenue, until such time as the requirements of any such tax Act are satisfied.

Before any certificate of registration is suspended or revoked, the holder shall be given written notice of the proposed action and the reasons for the proposed action and shall be provided a public hearing by the Department with the right to produce testimony and other evidence concerning the charges made. The notice shall also state the place and date of the hearing, which shall be at least 10 days after service of the notice.

All orders of the Department denying an application for a certificate of registration or suspending or revoking a certificate of registration or imposing a civil penalty shall be subject to judicial review pursuant to the Administrative Review Law.

The proceedings for judicial review shall be commenced in the circuit court of the county in which the party applying for review is located; but if the party is not currently located in Illinois, the venue shall be in Sangamon County. The Department shall not be required to certify any record to the court or file any answer in court or otherwise appear in any court in a judicial review proceeding, unless and until the Department has received from the plaintiff payment of the costs of furnishing and certifying the record, which costs shall be determined by the Department. Exhibits shall be certified without cost. Failure on the part of the plaintiff to file a receipt in court is grounds for dismissal of the action.

Whenever the Department has reason to believe a limited liability company has opened, operated, or maintained an establishment for any of the purposes for which a limited liability company may be organized under this Act without a certificate of registration from the Department authorized by law to license individuals to engage in the profession or related professions, the Department may issue a notice of violation to the limited liability company. The notice of violation shall provide a period of 30 days after the date of the notice to either file an answer to the satisfaction of the Department or submit an application for registration in compliance with this Act, including payment of the $50 application fee and a late fee of $100 for each year that the limited liability company opened, operated, or maintained an establishment for any of the purposes for which a limited liability company may be organized under this Act without having been issued a certificate of registration, with a maximum late fee of $500. If the limited liability company that is the subject of the notice of violation fails to respond, fails to respond to the satisfaction of the Department, or fails to submit an application for registration, the Department may institute disciplinary proceedings against the limited liability company and may impose a civil penalty up to $10,000 for violation of this Act after affording the limited liability company a hearing in conformance with the requirements of this Act.

(805 ILCS 180/5-5)

Sec. 5-5. Articles of organization.

(a) The articles of organization shall set forth all of the following:

(1) The name of the limited liability company and the address of its principal place of business which may, but need not be a place of business in this State.

(2) The purposes for which the limited liability company is organized, which may be stated to be, or to include, the transaction of any or all lawful businesses for which limited liability companies may be organized under this Act.

(3) The name of its registered agent and the address of its registered office.

(4) If the limited liability company is to be managed by a manager or managers, the names and business addresses of the initial manager or managers.

(5) If management of the limited liability company is to be vested in the members under Section 15-1, then the names and addresses of the initial member or members.

(5.5) The duration of the limited liability company, which shall be perpetual unless otherwise stated.

(6) (Blank).

(7) The name and address of each organizer.

(8) Any other provision, not inconsistent with law, that the members elect to set out in the articles of organization for the regulation of the internal affairs of the limited liability company, including any provisions that, under this Act, are required or permitted to be set out in the operating agreement of the limited liability company.

(b) A limited liability company is organized at the time articles of organization are filed by the Secretary of State or at any later time, not more than 60 days after the filing of the articles of organization, specified in the articles of organization.

(c) Articles of organization for the organization of a limited liability company for the purpose of accepting and executing trusts shall not be filed by the Secretary of State until there is delivered to him or her a statement executed by the Secretary of Financial and Professional Regulation Commissioner of the Office of Banks and Real Estate that the organizers of the limited liability company have made arrangements with the Secretary of Financial and Professional Regulation Commissioner of the Office of Banks and Real Estate to comply with the Corporate Fiduciary Act.

(d) Articles of organization for the organization of a limited liability company as a bank or a savings bank must be filed with the Department of Financial and Professional Regulation Commissioner of Banks and Real Estate or, if the bank or savings bank will be organized under federal law, with the appropriate federal banking regulator.

(Source: P.A. 98-171, eff. 8-5-13.)

(805 ILCS 180/5-55)

Sec. 5-55. Filing in Office of Secretary of State.

(a) Whenever any provision of this Act requires a limited liability company to file any document with the Office of the Secretary of State, the requirement means that:

(1) the original document, executed as described in Section 5-45, and, if required by this Act to be filed in duplicate, one copy (which may be a signed carbon or photocopy) shall be delivered to the Office of the Secretary of State;

(2) all fees and charges authorized by law to be collected by the Secretary of State in connection with the filing of the document shall be tendered to the Secretary of State; and

(3) unless the Secretary of State finds that the document does not conform to law, he or she shall, when all fees have been paid:

(A) endorse on the original and on the copy the word "Filed" and the month, day, and year of the filing thereof;

(B) file in his or her office the original of the document; and

(C) return the copy to the person who filed it or to that person's representative.

(b) If another Section of this Act specifically prescribes a manner of filing or signing a specified document that differs from the corresponding provisions of this Section, then the provisions of the other Section shall govern.

(c) Whenever any provision of this Act requires a limited liability company that is a bank or a savings bank to file any document, that requirement means that the filing shall be made exclusively with the Department of Financial and Professional Regulation Commissioner of Banks and Real Estate or, if the bank or savings bank is organized under federal law, with the appropriate federal banking regulator at such times and in such manner as required by the Department Commissioner or federal regulator.

(Source: P.A. 92-33, eff. 7-1-01; 93-561, eff. 1-1-04.)".