Full Text of HB2860 101st General Assembly
HB2860enr 101ST GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning business.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Entity Omnibus Act is amended by changing | 5 | | Sections 103, 202, 203, 205, 206, 302, 305, and 306 and by | 6 | | adding Sections 110 and 111 as follows: | 7 | | (805 ILCS 415/103)
| 8 | | Sec. 103. Relationship of Act to other laws. | 9 | | (a) Unless displaced by particular provisions of this Act | 10 | | or the organic law , the principles of law and equity supplement | 11 | | this Act. | 12 | | (b) This Act does not authorize an act prohibited by, and | 13 | | does not affect, the application or requirements of law, other | 14 | | than this Act.
| 15 | | (c) A transaction effected under this Act may not create or | 16 | | impair any right or obligation on the part of a person under a | 17 | | provision of the law of this State other than this Act relating | 18 | | to a transaction involving a converting or domesticating entity | 19 | | unless: | 20 | | (1) in the event the entity does not survive the | 21 | | transaction, the transaction satisfies any requirements of | 22 | | the provision; or | 23 | | (2) in the event the entity survives the transaction, |
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| 1 | | the approval of the plan is by a vote of the interest | 2 | | holders or governors which would be sufficient to create or | 3 | | impair the right or obligation directly under the | 4 | | provision.
| 5 | | (Source: P.A. 100-561, eff. 7-1-18 .) | 6 | | (805 ILCS 415/110 new) | 7 | | Sec. 110. Interrogatories to be propounded by the Secretary | 8 | | of State. | 9 | | (a) The Secretary of State may propound to any entity, | 10 | | domestic or foreign, subject to the provisions of this Act, and | 11 | | to any governor or interest holder thereof, such | 12 | | interrogatories as may be reasonably necessary and proper to | 13 | | enable the Secretary to ascertain whether the entity has | 14 | | complied with all the provisions of this Act applicable to the | 15 | | entity. The interrogatories shall be answered within 30 days | 16 | | after the mailing thereof, or within such additional time as | 17 | | shall be fixed by the Secretary of State, and the answers | 18 | | thereto shall be full and complete and shall be made in writing | 19 | | and under oath. If the interrogatories are directed to an | 20 | | individual, they shall be answered by him or her, and if | 21 | | directed to an entity, they shall be answered by the governor | 22 | | or interest holder thereof. The Secretary of State need not | 23 | | file any document to which the interrogatories relate until the | 24 | | interrogatories are answered as herein provided, and not then | 25 | | if the answers thereto disclose that the document is not in |
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| 1 | | conformity with the provisions of this Act. The Secretary of | 2 | | State shall certify to the Attorney General, for such action as | 3 | | the Attorney General may deem appropriate, all interrogatories | 4 | | and answers thereto that disclose a violation of any of the | 5 | | provisions of this Act. | 6 | | (b) Interrogatories propounded by the Secretary of State | 7 | | and the answers thereto shall not be open to public inspection | 8 | | nor shall the Secretary of State disclose any facts or | 9 | | information obtained therefrom except in so far as official | 10 | | duty may require the same to be made public or if the | 11 | | interrogatories or the answers thereto are required for | 12 | | evidence in any criminal proceeding or in any other action by | 13 | | the State. | 14 | | (805 ILCS 415/111 new) | 15 | | Sec. 111. Application of other Acts. The Business | 16 | | Corporation Act of 1983, the General Not For Profit Corporation | 17 | | Act of 1986, the Limited Liability Company Act, the Uniform | 18 | | Limited Partnership Act (2001), and the Uniform Partnership Act | 19 | | (1997), as now or hereafter amended, shall govern all matters | 20 | | related to the entities named in each of those Acts and in this | 21 | | Act except where inconsistent with the letter and purpose of | 22 | | this Act. This Act controls in the event of any conflict with | 23 | | the provisions of the above-named Acts or other laws. | 24 | | (805 ILCS 415/202)
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| 1 | | Sec. 202. Plan of conversion. | 2 | | (a) A domestic entity may convert to a different type of | 3 | | entity under this Article by approving a plan of conversion. | 4 | | The plan must be in a record and contain:
| 5 | | (1) the name and type of the converting entity; | 6 | | (2) the name, jurisdiction of organization, and type of | 7 | | the converted entity; | 8 | | (3) the manner of converting the interests in the | 9 | | converting entity into interests, securities, obligations, | 10 | | rights to acquire interests or securities, cash, or other | 11 | | property, or any combination of the foregoing; | 12 | | (4) the proposed public organic document of the | 13 | | converted entity if it will be a filing entity; | 14 | | (5) the full text of the private organic rules of the | 15 | | converted entity that are proposed to be in a record; | 16 | | (6) the other terms and conditions of the conversion; | 17 | | and | 18 | | (7) any other provision required by the law of this | 19 | | State or the organic rules of the converting entity. | 20 | | (b) A plan of conversion may contain any other provision | 21 | | not prohibited by law.
| 22 | | (c) The entity shall maintain the plan of conversion in | 23 | | accordance with the entity's policy for maintaining books and | 24 | | records. | 25 | | (Source: P.A. 100-561, eff. 7-1-18 .) |
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| 1 | | (805 ILCS 415/203)
| 2 | | Sec. 203. Approval of conversion. | 3 | | (a) A plan of conversion is not effective unless it has | 4 | | been approved: | 5 | | (1) by a domestic converting entity: | 6 | | (A) in accordance with the requirements, if any, in | 7 | | its organic rules for approval of a conversion; | 8 | | (B) if its organic rules do not provide for | 9 | | approval of a conversion, in accordance with the | 10 | | requirements, if any, in its organic law and organic | 11 | | rules for approval of:
| 12 | | (i) in the case of an entity that is not a | 13 | | business corporation, a merger, as if the | 14 | | conversion were a merger; or | 15 | | (ii) in the case of a business corporation, a | 16 | | merger requiring approval by a vote of the interest | 17 | | holders of the business corporation, as if the | 18 | | conversion were that type of merger; or
| 19 | | (C) if neither its organic law nor organic rules | 20 | | provide for approval of a conversion or a merger | 21 | | described in subparagraph (B)(ii), by all of the | 22 | | interest holders of the entity entitled to vote on or | 23 | | consent to any matter; and
| 24 | | (2) in a record, by each interest holder of a domestic | 25 | | converting entity that will have interest holder liability | 26 | | for liabilities that arise after the conversion becomes |
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| 1 | | effective . , unless, in the case of an entity that is not a | 2 | | business or nonprofit corporation: | 3 | | (A) the organic rules of the entity provide in a | 4 | | record for the approval of a conversion or a merger in | 5 | | which some or all of its interest holders become | 6 | | subject to interest holder liability by the vote or | 7 | | consent of fewer than all of the interest holders; and | 8 | | (B) the interest holder voted for or consented in a | 9 | | record to that provision of the organic rules or became | 10 | | an interest holder after the adoption of that | 11 | | provision.
| 12 | | (b) A conversion of a foreign converting entity is not | 13 | | effective unless it is approved by the foreign entity in | 14 | | accordance with the law of the foreign entity's jurisdiction of | 15 | | organization.
| 16 | | (Source: P.A. 100-561, eff. 7-1-18 .) | 17 | | (805 ILCS 415/205)
| 18 | | Sec. 205. Statement of conversion; effective date. | 19 | | (a) A statement of conversion must be signed on behalf of | 20 | | the converting entity and filed with the Secretary of State. | 21 | | (b) A statement of conversion must contain:
| 22 | | (1) the name and type of the converting entity; | 23 | | (2) the name and type of the converted entity; | 24 | | (3) if the statement of conversion is not to be | 25 | | effective upon filing, the later date and time on which it |
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| 1 | | will become effective, which may not be more than 90 days | 2 | | after the date of filing; | 3 | | (4) a statement that the plan of conversion was | 4 | | approved in accordance with this Article; | 5 | | (5) the text of the converted entity's public organic | 6 | | document, as an attachment, signed by a person authorized | 7 | | by the entity; and | 8 | | (6) if the converted entity is a domestic limited | 9 | | liability partnership, the text of its statement of | 10 | | qualification, as an attachment, signed by a person | 11 | | authorized by the entity.
| 12 | | (c) In addition to the requirements of subsection (b), a | 13 | | statement of conversion may contain any other provision not | 14 | | prohibited by law. | 15 | | (d) If the converted entity is a domestic entity, its | 16 | | public organic document, if any, must satisfy the requirements | 17 | | of the law of this State and may omit any provision that is not | 18 | | required to be included in a restatement of the public organic | 19 | | document. | 20 | | (e) (Blank). A plan of conversion that is signed on behalf | 21 | | of a domestic converting entity and meets all of the | 22 | | requirements of subsection (b) may be filed with the Secretary | 23 | | of State instead of a statement of conversion and upon filing | 24 | | has the same effect. If a plan of conversion is filed as | 25 | | provided in this subsection, references in this Act to a | 26 | | statement of conversion refer to the plan of conversion filed |
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| 1 | | under this subsection. | 2 | | (f) A statement of conversion becomes effective upon the | 3 | | date and time of filing or the later date and time specified in | 4 | | the statement of conversion.
| 5 | | (Source: P.A. 100-561, eff. 7-1-18 .) | 6 | | (805 ILCS 415/206)
| 7 | | Sec. 206. Effect of conversion. | 8 | | (a) When a conversion becomes effective: | 9 | | (1) the converted entity is:
| 10 | | (A) organized under and subject to the organic law | 11 | | of the converted entity; and | 12 | | (B) the same entity without interruption as the | 13 | | converting entity, even though the organic law of the | 14 | | converted entity to may require or allow the name of | 15 | | the converted entity may be modified based on the type | 16 | | of entity ;
| 17 | | (2) all property of the converting entity continues to | 18 | | be vested in the converted entity without assignment, | 19 | | reversion, or impairment; | 20 | | (3) all liabilities of the converting entity continue | 21 | | as liabilities of the converted entity; | 22 | | (4) except as provided by law other than this Act or | 23 | | the plan of conversion, all of the rights, privileges, | 24 | | immunities, powers, and purposes of the converting entity | 25 | | remain in the converted entity; |
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| 1 | | (5) the name of the converted entity may be substituted | 2 | | for the name of the converting entity in any pending action | 3 | | or proceeding; | 4 | | (6) if a converted entity is a filing entity, its | 5 | | public organic document is effective and is binding on its | 6 | | interest holders; | 7 | | (7) if the converted entity is a limited liability | 8 | | partnership, its statement of qualification is effective | 9 | | simultaneously; | 10 | | (8) the private organic rules of the converted entity | 11 | | that are to be in a record, if any, approved as part of the | 12 | | plan of conversion are effective and are binding on and | 13 | | enforceable by:
| 14 | | (A) its interest holders; and | 15 | | (B) in the case of a converted entity that is not a | 16 | | business corporation or nonprofit corporation, any | 17 | | other person that is a party to an agreement that is | 18 | | part of the entity's private organic rules; and
| 19 | | (9) the interests in the converting entity are | 20 | | converted, and the interest holders of the converting | 21 | | entity are entitled only to the rights provided to them | 22 | | under the plan of conversion and to any appraisal rights | 23 | | they have under Section 109 and the converting entity's | 24 | | organic law. | 25 | | (b) Except as otherwise provided in the organic law or | 26 | | organic rules of the converting entity, the conversion does not |
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| 1 | | give rise to any rights that an interest holder, governor, or | 2 | | third party would otherwise have upon a dissolution, | 3 | | liquidation, or winding-up of the converting entity. | 4 | | (c) When a conversion becomes effective, a person that did | 5 | | not have interest holder liability with respect to the | 6 | | converting entity and that becomes subject to interest holder | 7 | | liability with respect to a domestic entity as a result of a | 8 | | conversion has interest holder liability only to the extent | 9 | | provided by the organic law of the entity and only for those | 10 | | liabilities that arise after the conversion becomes effective. | 11 | | (d) When a conversion becomes effective:
| 12 | | (1) the conversion does not discharge any interest | 13 | | holder liability under the organic law of a domestic | 14 | | converting entity to the extent the interest holder | 15 | | liability arose before the conversion became effective; | 16 | | (2) a person does not have interest holder liability | 17 | | under the organic law of a domestic converting entity for | 18 | | any liability that arises after the conversion becomes | 19 | | effective; | 20 | | (3) the organic law of a domestic converting entity | 21 | | continues to apply to the release, collection, or discharge | 22 | | of any interest holder liability preserved under paragraph
| 23 | | (1) as if the conversion had not occurred; and | 24 | | (4) a person has whatever rights of contribution from | 25 | | any other person as are provided by the organic law or | 26 | | organic rules of the domestic converting entity with |
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| 1 | | respect to any interest holder liability preserved under | 2 | | paragraph (1) as if the conversion had not occurred.
| 3 | | (e) When a conversion becomes effective, a foreign entity | 4 | | that is the converted entity: | 5 | | (1) may be served with process in this State for the | 6 | | collection and enforcement of any of its liabilities; and | 7 | | (2) appoints the Secretary of State as its agent for | 8 | | service of process for collecting or enforcing those | 9 | | liabilities.
| 10 | | (f) If the converting entity is a qualified foreign entity, | 11 | | the certificate of authority or other foreign qualification of | 12 | | the converting entity is canceled when the conversion becomes | 13 | | effective. | 14 | | (g) A conversion does not require the entity to wind up its | 15 | | affairs and does not constitute or cause the dissolution of the | 16 | | entity.
| 17 | | (Source: P.A. 100-561, eff. 7-1-18 .) | 18 | | (805 ILCS 415/302)
| 19 | | Sec. 302. Plan of domestication. | 20 | | (a) A domestic entity may become a foreign entity in a | 21 | | domestication by approving a plan of domestication. The plan | 22 | | must be in a record and contain: | 23 | | (1) the name and type of the domesticating entity; | 24 | | (2) the name and jurisdiction of organization of the | 25 | | domesticated entity; |
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| 1 | | (3) the manner of converting the interests in the | 2 | | domesticating entity into interests, securities, | 3 | | obligations, rights to acquire interests or securities, | 4 | | cash, or other property, or any combination of the | 5 | | foregoing; | 6 | | (4) the proposed public organic document of the | 7 | | domesticated entity if it is a filing entity; | 8 | | (5) the full text of the private organic rules of the | 9 | | domesticated entity that are proposed to be in a record; | 10 | | (6) the other terms and conditions of the | 11 | | domestication; and | 12 | | (7) any other provision required by the law of this | 13 | | State or the organic rules of the domesticating entity.
| 14 | | (b) A plan of domestication may contain any other provision | 15 | | not prohibited by law.
| 16 | | (c) The entity shall maintain the plan of domestication in | 17 | | accordance with the entity's policy for maintaining books and | 18 | | records. | 19 | | (Source: P.A. 100-561, eff. 7-1-18 .) | 20 | | (805 ILCS 415/305)
| 21 | | Sec. 305. Statement of domestication; effective date.
| 22 | | (a) A statement of domestication must be signed on behalf | 23 | | of the domesticating entity and filed with the Secretary of | 24 | | State. | 25 | | (b) A statement of domestication must contain:
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| 1 | | (1) the name, jurisdiction of organization, and type of | 2 | | the domesticating entity; | 3 | | (2) the name and jurisdiction of organization of the | 4 | | domesticated entity; | 5 | | (3) if the statement of domestication is not to be | 6 | | effective upon filing, the later date and time on which it | 7 | | will become effective, which may not be more than 30 90 | 8 | | days after the date of filing; | 9 | | (4) if the domesticating entity is a domestic entity, a | 10 | | statement that the plan of domestication was approved in | 11 | | accordance with this Article or, if the domesticating | 12 | | entity is a foreign entity, a statement that the | 13 | | domestication was approved in accordance with the law of | 14 | | its jurisdiction of organization; | 15 | | (5) if the domesticated entity is a domestic filing | 16 | | entity, its public organic document, as an attachment | 17 | | signed by a person authorized by the entity; | 18 | | (6) if the domesticated entity is a domestic limited | 19 | | liability partnership, its statement of qualification, as | 20 | | an attachment; and | 21 | | (7) if the domesticated entity is a foreign entity that | 22 | | is not a qualified foreign entity, a mailing address to | 23 | | which the Secretary of State may send any process served on | 24 | | the Secretary of State pursuant to subsection (e) of | 25 | | Section 306.
| 26 | | (c) In addition to the requirements of subsection (b), a |
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| 1 | | statement of domestication may contain any other provision not | 2 | | prohibited by law. | 3 | | (d) If the domesticated entity is a domestic entity, its | 4 | | public organic document, if any, must satisfy the requirements | 5 | | of the law of this State and may omit any provision that is not | 6 | | required to be included in a restatement of the public organic | 7 | | document. | 8 | | (e) A statement of domestication becomes effective upon the | 9 | | date and time of filing or the later date and time specified in | 10 | | the statement of domestication.
| 11 | | (Source: P.A. 100-561, eff. 7-1-18 .) | 12 | | (805 ILCS 415/306)
| 13 | | Sec. 306. Effect of domestication. | 14 | | (a) When a domestication becomes effective: | 15 | | (1) the domesticated entity is: | 16 | | (A) organized under and subject to the organic law | 17 | | of the domesticated entity; and | 18 | | (B) the same entity without interruption as the | 19 | | domesticating entity , even though the organic law of | 20 | | the domesticated entity may require or allow the name | 21 | | of the domesticated entity to be modified ;
| 22 | | (2) all property of the domesticating entity continues | 23 | | to be vested in the domesticated entity without assignment, | 24 | | reversion, or impairment; | 25 | | (3) all liabilities of the domesticating entity |
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| 1 | | continue as liabilities of the domesticated entity; | 2 | | (4) except as provided by law other than this Act or | 3 | | the plan of domestication, all of the rights, privileges, | 4 | | immunities, powers, and purposes of the domesticating | 5 | | entity remain in the domesticated entity; | 6 | | (5) the name of the domesticated entity may be | 7 | | substituted for the name of the domesticating entity in any | 8 | | pending action or proceeding; | 9 | | (6) if the domesticated entity is a filing entity, its | 10 | | public organic document is effective and is binding on its | 11 | | interest holders; | 12 | | (7) the private organic rules of the domesticated | 13 | | entity that are to be in a record, if any, approved as part | 14 | | of the plan of domestication are effective and are binding | 15 | | on and enforceable by:
| 16 | | (A) its interest holders; and | 17 | | (B) in the case of a domesticated entity that is | 18 | | not a business corporation
or nonprofit corporation, | 19 | | any other person that is a party to an agreement that | 20 | | is part of the domesticated entity's private organic | 21 | | rules; and
| 22 | | (8) the interests in the domesticating entity are | 23 | | converted to the extent and as approved in connection with | 24 | | the domestication, and the interest holders of the | 25 | | domesticating entity are entitled only to the rights | 26 | | provided to them under the plan of domestication and to any |
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| 1 | | appraisal rights they have under Section 109 and the | 2 | | domesticating entity's organic law.
| 3 | | (b) Except as otherwise provided in the organic law or | 4 | | organic rules of the domesticating entity, the domestication | 5 | | does not give rise to any rights that an interest holder, | 6 | | governor, or third party would otherwise have upon a | 7 | | dissolution, liquidation, or winding-up of the domesticating | 8 | | entity. | 9 | | (c) When a domestication becomes effective, a person that | 10 | | did not have interest holder liability with respect to the | 11 | | domesticating entity and that becomes subject to interest | 12 | | holder liability with respect to a domestic entity as a result | 13 | | of the domestication has interest holder liability only to the | 14 | | extent provided by the organic law of the entity and only for | 15 | | those liabilities that arise after the domestication becomes | 16 | | effective. | 17 | | (d) When a domestication becomes effective:
| 18 | | (1) the domestication does not discharge any interest | 19 | | holder liability under the organic law of a domestic | 20 | | domesticating entity to the extent the interest holder | 21 | | liability arose before the domestication became effective; | 22 | | (2) a person does not have interest holder liability | 23 | | under the organic law of a domestic domesticating entity | 24 | | for any liability that arises after the domestication | 25 | | becomes effective; | 26 | | (3) the organic law of a domestic domesticating entity |
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| 1 | | continues to apply to the release, collection, or discharge | 2 | | of any interest holder liability preserved under paragraph
| 3 | | (1) as if the domestication had not occurred; and | 4 | | (4) a person has whatever rights of contribution from | 5 | | any other person as are provided by the organic law or | 6 | | organic rules of a domestic domesticating entity with | 7 | | respect to any interest holder liability preserved under | 8 | | paragraph (1) as if the domestication had not occurred.
| 9 | | (e) When a domestication becomes effective, a foreign | 10 | | entity that is the domesticated
entity: | 11 | | (1) may be served with process in this State for the | 12 | | collection and enforcement of any of its liabilities; and | 13 | | (2) appoints the Secretary of State as its agent for | 14 | | service of process for
collecting or enforcing those | 15 | | liabilities.
| 16 | | (f) If the domesticating entity is a qualified foreign | 17 | | entity, the certificate of authority or other foreign | 18 | | qualification of the domesticating entity is canceled when the | 19 | | domestication becomes effective. | 20 | | (g) A domestication does not require the entity to wind up | 21 | | its affairs and does not constitute or cause the dissolution of | 22 | | the entity.
| 23 | | (Source: P.A. 100-561, eff. 7-1-18 .)
| 24 | | Section 99. Effective date. This Act takes effect July 1, | 25 | | 2019.
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