(805 ILCS 180/35-1)
Sec. 35-1. Events causing dissolution and winding up of company's
business. (a)
A limited liability company is dissolved and its business must be wound
up upon the occurrence of any of the following events:
(1) An event or circumstance that causes the |
| dissolution of a company by the express terms of the operating agreement.
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(2) The consent of all members.
(3) The passage of 180 consecutive days during which
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| the company has no members.
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(4) On application by a member or a dissociated
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| member, upon entry of a judicial decree that:
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(A) the economic purpose of the company has been
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| or is likely to be unreasonably frustrated;
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(B) the conduct of all or substantially all of
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| the company's activities is unlawful;
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(C) it is not otherwise reasonably practicable to
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| carry on the company's business in conformity with the articles of organization and the operating agreement.
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(5) On application by a member or transferee of a
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| distributional interest, upon entry of a judicial decree that the managers or those members in control of the company:
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(A) have acted, are acting, or will act in a
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| manner that is illegal or fraudulent; or
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(B) have acted or are acting in a manner that is
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| oppressive and was, is, or will be directly harmful to the applicant.
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(6) Administrative dissolution under Section 35-25.
(b) In a proceeding under subdivision (4) or (5) of subsection (a), the court may order a remedy other than dissolution including, but not limited to, a buyout of the applicant's distributional interest.
(Source: P.A. 101-553, eff. 1-1-20 .)
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(805 ILCS 180/35-3)
Sec. 35-3. Limited liability company continues after dissolution.
(a) Subject to subsections (b), (c), and (d) of this
Section, a limited liability company
continues after
dissolution only for the purpose of winding up its business.
(b) At any time after the dissolution of a limited liability company and
before the winding up of its business is completed, the members, including a
dissociated member whose dissociation caused the dissolution, may unanimously
waive the right to have the company's business wound up and the company
terminated. In that case:
(1) the limited liability company resumes carrying on |
| its business as if dissolution had never occurred, and any liability incurred by the company or a member after the dissolution and before the waiver is determined as if the dissolution had never occurred; and
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(2) the rights of a third party accruing under
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| subsection (a) of Section 35-7 or arising out of conduct in reliance on the dissolution before the third party knew or received a notification of the waiver are not adversely affected.
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(c) If there are no members, the legal representative of the last remaining member may, within one year after the occurrence of the event that caused the dissociation of the last remaining member, agree in writing to continue the limited liability company. In that event, the legal representative or its nominee or designee will be admitted to the company as a member and the company will not be dissolved or its business wound up until the occurrence of a future event of dissolution, if any.
(d) This Section does not apply in the case of a dissolution described in subdivision (4), (5), or (6) of Section 35-1.
(Source: P.A. 98-720, eff. 7-16-14; 99-637, eff. 7-1-17 .)
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(805 ILCS 180/35-4)
Sec. 35-4. Wind
up of limited liability company's business. (a) After dissolution, a member who has not wrongfully dissociated may
participate in winding up a limited liability
company's business.
(b) If a dissolved limited liability company has no members, the legal representative of the last person to have been a member may wind up the business of the company. If the person does so, the person has the powers of a sole manager under subsection (b) of Section 15-1 and is deemed to be a manager for the purposes of subsection (a) of Section 10-10.
(c) A person winding up a limited liability company's business (1) may preserve
the company's business or property as a going concern for a reasonable
time, prosecute and defend actions and proceedings, whether civil, criminal, or
administrative, dispose of
and transfer the company's property, settle disputes by mediation or arbitration, and perform other acts necessary or appropriate to winding up and (2) shall discharge the company's debts, obligations, or other liabilities, settle and close the company's business and marshal and
distribute the assets of the company pursuant to Section 35-10.
(d) If the legal representative under subsection (b) declines or fails to wind up the company's business, a person may be appointed to do so by the consent of transferees owning a majority of the rights to receive distributions as transferees at the time the consent is to be effective. A person appointed under this subsection: (1) has the powers of a sole manager under |
| subsection (b) of Section 15-1 and is deemed to be a manager for the purposes of subsection (a) of Section 10-10; and
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(2) shall promptly deliver to the Secretary of State
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| for filing an amendment to the company's articles of organization to:
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(A) state that the company has no members;
(B) state that the person has been appointed
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| pursuant to this subsection to wind up the company; and
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(C) provide the mailing addresses of the person.
(e) The circuit court may order judicial supervision of the winding up of a dissolved limited liability company, including the appointment of a person to wind up the company's business:
(1) on application of a member, if the applicant
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(2) on the application of a transferee, if:
(A) the company does not have any members;
(B) the legal representative of the last person
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| to have been a member declines or fails to wind up the company's business; and
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(C) within a reasonable time following the
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| dissolution a person has not been appointed pursuant to subsection (d); or
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(3) in connection with a proceeding under
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| subdivision (4) of subsection (a) of Section 35-1.
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(Source: P.A. 99-637, eff. 7-1-17 .)
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(805 ILCS 180/35-25)
Sec. 35-25. Grounds for administrative dissolution. The Secretary of State may dissolve any limited liability
company administratively if:
(1) it has failed to file its annual report and pay |
| its fee as required by this Act before the first day of the anniversary month or has failed to pay any fees, penalties, or charges required by this Act;
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(2) it has failed to file in the Office of the
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| Secretary of State any report after the expiration of the period prescribed in this Act for filing the report;
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(2.5) it has misrepresented any material matter in
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| any application, report, affidavit, or other document submitted by the limited liability company under this Act;
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(3) it has failed to appoint and maintain a
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| registered agent in Illinois in accordance with the provisions of this Act;
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(4) a manager or member to whom interrogatories have
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| been propounded by the Secretary of State as provided in Section 5-60 of this Act fails to answer the interrogatories fully and to timely file the answer in the office of the Secretary of State; or
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(5) it has tendered payment to the Secretary of State
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| which is returned due to insufficient funds, a closed account, or for any other reason, and acceptable payment has not been subsequently tendered.
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(Source: P.A. 98-171, eff. 8-5-13; 99-608, eff. 7-22-16.)
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(805 ILCS 180/35-30)
Sec. 35-30. Procedure for administrative dissolution.
(a) After the Secretary of State determines that one or more grounds exist
under Section 35-25 for the administrative dissolution of a limited liability
company, the Secretary of State shall send a notice of delinquency by regular
mail to each delinquent limited liability company at its registered office or,
if the limited liability company has failed to maintain a registered office,
then to the last known address shown on the records of the Secretary of State
for the principal place of business of the limited liability company.
(b) If the limited liability company does not correct
the default described in paragraphs (1) or (2) of Section 35-25 within 120 days following the date of the notice
of delinquency, the Secretary of State shall thereupon
dissolve the limited liability company by issuing a certificate of dissolution that
recites the grounds for dissolution and its effective date. If the limited liability company does not correct the default described in paragraphs (2.5), (3), (4), or (5) of Section 35-25 within 60 days following the notice, the Secretary of State shall dissolve the limited liability company by issuing a certificate of dissolution that recites the grounds for dissolution and its effective date. The Secretary of
State shall file the original of the certificate in his or her office and mail one
copy to the limited liability company at its registered office or, if the
limited liability company has failed to maintain a registered office, then to
the last known address shown on the records of the Secretary of State for the
principal place of business of the limited liability company.
(c) Upon the administrative dissolution of a limited liability company, a
dissolved limited liability company shall continue for only the purpose of
winding up its business. A dissolved
limited liability company may take all action authorized
under Section 1-30 or otherwise necessary or appropriate to wind up its
business and affairs and terminate.
(d) The Secretary of State shall, from information received from the Illinois Commerce Commission, compile and keep a list of all domestic limited liability companies that are regulated pursuant to the provisions of the Public Utilities Act, or the Collateral Recovery Act, or the Personal Property Storage Act, or Chapter 18a, 18c, or 18d of the Illinois Vehicle Code and which hold, as a prerequisite for doing business in this State, any franchise, license, permit, or right to engage in any business regulated by such Acts. (e) Each month the Secretary of State shall, by written notice, advise the Chief Clerk of the Illinois Commerce Commission of any domestic limited liability company on the list maintained under subsection (d) that has been dissolved within the month. (f) The Secretary of State and the Illinois Commerce Commission may provide each other the information required under this Section in an electronic format, including, without limitation by means of such agreed access, those records of the Secretary of State that will provide the Illinois Commerce Commission the information it requires under the statutes it administers. The provision of information under this Section shall begin as soon as is practicable, but in no event later than October 1, 2020. (Source: P.A. 101-494, eff. 1-1-20 .)
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(805 ILCS 180/35-40)
Sec. 35-40. Reinstatement following administrative
dissolution. (a) A limited liability company administratively
dissolved under Section 35-25 may be reinstated by the
Secretary of State following the date of
issuance of the notice of dissolution upon:
(1) The filing of an application for
reinstatement.
(2) The filing with the Secretary of State by the |
| limited liability company of all reports then due and theretofore becoming due.
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(3) The payment to the Secretary of State by the
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| limited liability company of all fees and penalties then due and theretofore becoming due.
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(b) The application for reinstatement shall be executed
and filed in duplicate in accordance with Section 5-45 of
this Act and shall set forth all of the following:
(1) The name of the limited liability company at the
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| time of the issuance of the notice of dissolution.
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(2) If the name is not available for use as
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| determined by the Secretary of State at the time of filing the application for reinstatement, the name of the limited liability company as changed, provided that any change of name is properly effected under Section 1-10 and Section 5-25 of this Act.
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(3) The date of issuance of the notice of
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(4) The address, including street and number or rural
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| route number of the registered office of the limited liability company upon reinstatement thereof and the name of its registered agent at that address upon the reinstatement of the limited liability company, provided that any change from either the registered office or the registered agent at the time of dissolution is properly reported under Section 1-35 of this Act.
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(c) When a dissolved limited liability company has
complied with the provisions of the Section, the Secretary of
State shall file the application for
reinstatement.
(d) Upon the filing of the application for
reinstatement, the limited liability company existence shall
be deemed to have continued without interruption from the
date of the issuance of the notice of dissolution, and the
limited liability company shall stand revived with the
powers, duties, and obligations as if it had not been
dissolved; and all acts and proceedings of its members,
managers, officers, employees, and agents, acting or purporting to act in that capacity, and which
would have been legal and valid but for the dissolution,
shall stand ratified and confirmed.
(e) Without limiting the generality of subsection (d), upon the filing of the application for reinstatement, no member, manager, or officer shall be personally liable for the debts and liabilities of the limited liability company incurred during the period of administrative dissolution by reason of the fact that the limited liability company was administratively dissolved at the time the debts or liabilities were incurred.
(Source: P.A. 98-776, eff. 1-1-15; 99-78, eff. 7-20-15.)
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(805 ILCS 180/35-45)
Sec. 35-45. Events causing member's dissociation. A member is dissociated from a limited liability company upon the occurrence of
any of the following events:
(1) The company's having notice of the member's |
| express will to dissociate upon the date of notice or on a later date specified by the member.
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(2) An event agreed to in the operating agreement as
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| causing the member's dissociation.
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(3) Upon transfer of all of a member's distributional
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| interest, other than a transfer for security purposes or a court order charging the member's distributional interest that has not been foreclosed.
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(4) The member's expulsion pursuant to the operating
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(5) The member's expulsion by unanimous vote of the
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(A) it is unlawful to carry on the company's
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| business with the member;
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(B) there has been a transfer of substantially
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| all of the member's distributional interest, other than a transfer for security purposes or a court order charging the member's distributional interest that has not been foreclosed;
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(C) within 90 days after the company notifies a
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| corporate member that it will be expelled because it has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, the member fails to obtain a revocation of the certificate of dissolution or a reinstatement of its charter or its right to conduct business; or
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(D) a partnership or a limited liability company
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| that is a member has been dissolved and its business is being wound up.
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(6) On application by the company or another member,
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| the member's expulsion by judicial determination because the member:
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(A) engaged in wrongful conduct that adversely
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| and materially affected the company's business;
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(B) willfully or persistently committed a
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| material breach of the operating agreement or of a duty owed to the company or the other members under Section 15-3; or
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(C) engaged in conduct relating to the company's
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| business that makes it not reasonably practicable to carry on the business with the member.
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(7) The member's:
(A) becoming a debtor in bankruptcy;
(B) executing an assignment for the benefit of
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(C) seeking, consenting to, or acquiescing in the
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| appointment of a trustee, receiver, or liquidator of the member or of all or substantially all of the member's property; or
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(D) failing, within 90 days after the
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| appointment, to have vacated or stayed the appointment of a trustee, receiver, or liquidator of the member or of all or substantially all of the member's property obtained without the member's consent or acquiescence, or failing within 90 days after the expiration of a stay to have the appointment vacated.
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(8) In the case of a member who is an individual:
(A) the member's death;
(B) the appointment of a guardian or general
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| conservator for the member; or
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(C) a judicial determination that the member has
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| otherwise become incapable of performing the member's duties under the operating agreement.
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(9) In the case of a member that is a trust or is
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| acting as a member by virtue of being a trustee of a trust, distribution of the trust's entire rights to receive distributions from the company, but not merely by reason of the substitution of a successor trustee.
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(10) In the case of a member that is an estate or is
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| acting as a member by virtue of being a personal representative of an estate, distribution of the estate's entire rights to receive distributions from the company, but not merely the substitution of a successor personal representative.
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(11) Termination of the existence of a member if the
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| member is not an individual, estate, or trust other than a business trust.
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(12) In the case of a company that participates in a
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| merger under Article 37, if:
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(A) the company is not the surviving entity; or
(B) otherwise as a result of the merger, the
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| person ceases to be a member.
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(13) The company participates in a conversion under
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(14) The company participates in a domestication
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| under the Entity Omnibus Act, if, as a result, the person ceases to be a member.
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(Source: P.A. 100-561, eff. 7-1-18; 101-553, eff. 1-1-20 .)
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(805 ILCS 180/35-55)
Sec. 35-55. Effect of member's dissociation.
(a) Upon a member's dissociation from a limited liability company:
(1) the member's right to participate in the |
| management and conduct of the company's business terminates, except as otherwise provided in Section 35-4, and the member ceases to be a member and is treated the same as a transferee of a member;
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(2) the member's fiduciary duties terminate, except
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| as provided in subdivision (3) of this subsection (a);
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(3) the member's duty of loyalty under subdivisions
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| (1) and (2) of subsection (b) of Section 15-3 and duty of care under subsection (c) of Section 15-3 continue only with regard to matters arising and events occurring before the member's dissociation, unless the member participates in winding up the company's business pursuant to Section 35-4; and
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(4) subject to Section 30-25 and Article 37, any
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| distributional interest owned by the person immediately before dissociation in the person's capacity as a member is owned by the person solely as a transferee.
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(b) A person's dissociation as a member of a limited liability company does not of itself discharge the person from any debt, obligation, or other liability to the company or the other members which the person incurred while a member.
(Source: P.A. 99-637, eff. 7-1-17 .)
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