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90_SB1020enr
New Act
35 ILCS 5/1501 from Ch. 120, par. 15-1501
805 ILCS 180 Art. 57 heading new
805 ILCS 180/57-1 new
805 ILCS 180/57-5 new
Creates the Uniform Limited Liability Company Act (1995).
Provides for the organization and operation of limited
liability companies. Applies, with certain exceptions, to
all limited liability companies formed after December 31,
1997. Provides that existing limited liability companies may
elect to be subject to this Act. Provides for the repeal of
the Limited Liability Company Act on January 1, 2003.
Effective January 1, 1998.
LRB9003480JSgc
SB1020 Enrolled LRB9003480JSgc
1 AN ACT concerning limited liability companies, amending
2 named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 4. The Corporate Fiduciary Act is amended by
6 changing Sections 1-5.09, 1-5.11, 1-6, and 3-2 as follows:
7 (205 ILCS 620/1-5.09) (from Ch. 17, par. 1551-5.09)
8 Sec. 1-5.09. "Person" means an individual, corporation,
9 partnership, joint venture, trust estate, limited liability
10 company, or unincorporated association.
11 (Source: P.A. 85-858.)
12 (205 ILCS 620/1-5.11) (from Ch. 17, par. 1551-5.11)
13 Sec. 1-5.11. Trust company. "Trust company" means a
14 corporation incorporated or a limited liability company
15 organized in this State that holds a certificate of authority
16 issued pursuant to this Act.
17 (Source: P.A. 89-364, eff. 8-18-95.)
18 (205 ILCS 620/1-6) (from Ch. 17, par. 1551-6)
19 Sec. 1-6. General Corporate Powers. A corporate
20 fiduciary shall have the powers:
21 (a) if it is a State bank, those powers granted under
22 Sections 3 and 5 of the Illinois Banking Act, as now or
23 hereafter amended; and
24 (b) if it is a State savings and loan association, those
25 powers granted under Sections 1-6 through 1-8 of the Illinois
26 Savings and Loan Act of 1985, as now or hereafter amended;
27 and
28 (c) if it is a corporation organized under the Business
29 Corporation Act of 1983, as now or hereafter amended, or a
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1 limited liability company organized under the Limited
2 Liability Company Act, those powers granted in Sections 4.01
3 through 4.24 of the Trusts and Trustees Act, as now or
4 hereafter amended, to the extent the exercise of such powers
5 by the corporate fiduciary are not contrary to the instrument
6 containing the appointment of the corporate fiduciary, the
7 court order appointing the corporate fiduciary or any other
8 statute specifically limiting the power of the corporate
9 fiduciary under the circumstances.
10 The Commissioner may specify powers of corporate
11 fiduciaries generally or of a particular corporate fiduciary
12 and by rule or order limit or restrict such powers of
13 corporate fiduciaries or a particular corporate fiduciary if
14 he finds the exercise of such power by corporate fiduciaries
15 generally or of the corporate fiduciary in particular may
16 tend to be an unsafe or unsound practice, or if such power is
17 otherwise not in the interest of beneficiaries of any
18 fiduciary appointment.
19 (Source: P.A. 86-754.)
20 (205 ILCS 620/3-2) (from Ch. 17, par. 1553-2)
21 Sec. 3-2. Change in control.
22 (a) Before a change may occur in the ownership of
23 outstanding stock or membership interests of any trust
24 company whether by sale and purchase, gift, bequest or
25 inheritance, or any other means, which will result in control
26 or a change in the control of the trust company or before a
27 change in the control of a holding company having control of
28 the outstanding stock or membership interests of a trust
29 company whether by sale and purchase, gift, bequest or
30 inheritance, or any other means, which will result in control
31 or a change in control of the trust company or holding
32 company, the Commissioner shall be of the opinion and find:
33 (1) that the general character of its proposed
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1 management, after the change in control, is such as to
2 assure reasonable promise of competent, successful, safe
3 and sound operation;
4 (2) that the future earnings prospects, after the
5 proposed change in control, are favorable; and
6 (3) that the prior business affairs of the persons
7 proposing to obtain control or by the proposed management
8 personnel, whether as stockholder, director, member,
9 officer, or customer, were conducted in a safe, sound,
10 and lawful manner.
11 (b) Persons desiring to purchase control of an existing
12 trust company and persons obtaining control by gift, bequest
13 or inheritance, or any other means shall submit to the
14 Commissioner:
15 (1) A statement of financial worth; and
16 (2) Satisfactory evidence that the prior business
17 affairs of the persons and the proposed management
18 personnel, whether as stockholder, director, officer, or
19 customer, were conducted in a safe, sound, and lawful
20 manner.
21 As used in this Section, the term "control" means the
22 ownership of such amount of stock or membership interests or
23 ability to direct the voting of such stock or membership
24 interests as to give power to, directly or indirectly, direct
25 or cause the direction of the management or policies of the
26 trust company. A change in ownership of stock which would
27 result in direct or indirect ownership by a stockholder or
28 member, an affiliated group of stockholders or members or a
29 holding company of less than 10% of the outstanding stock or
30 membership interests shall not be considered a change of
31 control. A change in ownership of stock or membership
32 interests which would result in direct or indirect ownership
33 by a stockholder or member, an affiliated group of
34 stockholders or members or a holding company of 20% or such
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1 lesser amount which would entitle the holder by applying
2 cumulative voting to elect one director shall be presumed to
3 constitute a change of control for purposes of this Section.
4 If there is any doubt as to whether a change in the ownership
5 or control of the outstanding stock or membership interests
6 is sufficient to result in obtaining control thereof or to
7 effect a change in the control thereof, such doubt shall be
8 resolved in favor of reporting the facts to the Commissioner.
9 (c) Whenever a bank makes a loan or loans, secured, or
10 to be secured, by 25% or more of the outstanding stock of a
11 trust company, the president or other chief executive officer
12 of the lending bank shall promptly report such fact to the
13 Commissioner upon obtaining knowledge of such loan or loans,
14 except that no report need be made in those cases where the
15 borrower has been the owner of record of the stock for a
16 period of one year or more, or the stock is that of a
17 newly-organized trust company prior to its opening.
18 (d) (1) Before a purchase of substantially all the
19 assets and an assumption of substantially all the liabilities
20 of a trust company or before a purchase of substantially all
21 the trust assets and an assumption of substantially all the
22 trust liabilities of a trust company, the Commissioner shall
23 be of the opinion and find:
24 (i) that the general character of the acquirer's
25 proposed management, after the transfer, is such as to
26 assure reasonable promise of competent, successful, safe,
27 and sound operation;
28 (ii) that the acquirer's future earnings prospects,
29 after the proposed transfer, are favorable;
30 (iii) that any prior involvement by the acquirer or
31 by the proposed management personnel, whether as
32 stockholder, director, officer, agent, or customer, was
33 conducted in a safe, sound, and lawful manner;
34 (iv) that customers' interests will not be
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1 jeopardized by the purchase and assumption; and
2 (v) that adequate provision has been made for all
3 obligations and trusts as required under Section 7-1 of
4 this Act.
5 (2) Persons desiring to purchase substantially all the
6 assets and assume substantially all the liabilities of a
7 trust company or to purchase substantially all the trust
8 assets and assume substantially all the trust liabilities of
9 a trust company shall submit to the Commissioner:
10 (i) a statement of financial worth; and
11 (ii) satisfactory evidence that the prior business
12 affairs of the persons and the proposed management
13 personnel, whether as stockholder, director, officer, or
14 customer, were conducted in a safe, sound, and lawful
15 manner.
16 As used in this Section, "substantially all" the assets
17 or liabilities or the trust assets or trust liabilities of a
18 trust company means that portion such that their transfer
19 will materially impair the ability of the trust company to
20 continue successful, safe, and sound operations or to
21 continue as a going concern.
22 (e) The reports required by subsections (a),(b), (c),
23 and (d) of this Section 3-2 shall contain the following
24 information to the extent that it is known by the person
25 making the report: (1) the number of shares involved; (2) the
26 names of the sellers (or transferors); (3) the names of the
27 purchasers (or transferees); (4) the names of the beneficial
28 owners if the shares are registered in another name; (5) the
29 purchase price; (6) the total number of shares owned by the
30 sellers (or transferors), the purchasers (or transferees) and
31 the beneficial owners both immediately before and after the
32 transaction; and, (7) in the case of a loan, the name of the
33 borrower, the amount of the loan, and the name of the trust
34 company issuing the stock securing the loan and the number of
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1 shares securing the loan. In addition to the foregoing, such
2 reports shall contain such other information as may be
3 available and which is requested by the Commissioner to
4 inform the Commissioner of the effect of the transaction upon
5 the trust company or trust companies whose stock or assets
6 and liabilities are involved.
7 (f) Whenever such a change as described in subsection
8 (a) of this Section 3-2 occurs, each trust company shall
9 report promptly to the Commissioner any changes or
10 replacement of its chief executive officer or of any director
11 occurring in the next 12 month period, including in its
12 report a statement of the past and current business and
13 professional affiliations of the new chief executive officer
14 or directors.
15 (Source: P.A. 88-408; 89-364, eff. 8-18-95.)
16 Section 5. The Business Corporation Act of 1983 is
17 amended by changing Section 13.05 and adding Section 11.39 as
18 follows:
19 (805 ILCS 5/11.39 new)
20 Sec. 11.39. Merger of domestic corporation and limited
21 liability company.
22 (a) Any one or more domestic corporations may merge with
23 or into one or more limited liability companies of this
24 State, any other state or states of the United States, or the
25 District of Columbia, if the laws of the other state or
26 states or the District of Columbia permit the merger. The
27 domestic corporation or corporations and the limited
28 liability company or companies may merge with or into a
29 corporation, which may be any one of these corporations, or
30 they may merge with or into a limited liability company,
31 which may be any one of these limited liability companies,
32 which shall be a domestic corporation or limited liability
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1 company of this State, any other state of the United States,
2 or the District of Columbia, which permits the merger
3 pursuant to a plan of merger complying with and approved in
4 accordance with this Section.
5 (b) The plan of merger must set forth the following:
6 (1) The names of the domestic corporation or
7 corporations and limited liability company or companies
8 proposing to merge and the name of the domestic
9 corporation or limited liability company into which they
10 propose to merge, which is designated as the surviving
11 entity.
12 (2) The terms and conditions of the proposed merger
13 and the mode of carrying the same into effect.
14 (3) The manner and basis of converting the shares
15 of each domestic corporation and the interests of each
16 limited liability company into shares, interests,
17 obligations, other securities of the surviving entity or
18 into cash or other property or any combination of the
19 foregoing.
20 (4) In the case of a merger in which a domestic
21 corporation is the surviving entity, a statement of any
22 changes in the articles of incorporation of the surviving
23 corporation to be effected by the merger.
24 (5) Any other provisions with respect to the
25 proposed merger that are deemed necessary or desirable,
26 including provisions, if any, under which the proposed
27 merger may be abandoned prior to the filing of the
28 articles of merger by the Secretary of State of this
29 State.
30 (c) The plan required by subsection (b) of this Section
31 shall be adopted and approved by the constituent corporation
32 or corporations in the same manner as is provided in Sections
33 11.05, 11.15, and 11.20 of this Act and, in the case of a
34 limited liability company, in accordance with the terms of
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1 its operating agreement, if any, and in accordance with the
2 laws under which it was formed.
3 (d) Upon this approval, articles of merger shall be
4 executed by each constituent corporation and limited
5 liability company and filed as provided in Section 11.25 of
6 this Act and shall be recorded with respect to each
7 constituent corporation as provided in Section 11.45 of this
8 Act. The merger shall become effective for all purposes of
9 the laws of this State when and as provided in Section 11.40
10 of this Act with respect to the merger of corporations of
11 this State.
12 (e) If the surviving entity is to be governed by the
13 laws of the District of Columbia or any state other than this
14 State, it shall file with the Secretary of State of this
15 State an agreement that it may be served with process in this
16 State in any proceeding for enforcement of any obligation of
17 any constituent corporation or limited liability company of
18 this State, as well as for enforcement of any obligation of
19 the surviving corporation or limited liability company
20 arising from the merger, including any suit or other
21 proceeding to enforce the shareholders right to dissent as
22 provided in Section 11.70 of this Act, and shall irrevocably
23 appoint the Secretary of State of this State as its agent to
24 accept service of process in any such suit or other
25 proceedings.
26 (f) Section 11.50 of this Act shall, insofar as it is
27 applicable, apply to mergers between domestic corporations
28 and limited liability companies.
29 (g) In any merger under this Section, the surviving
30 entity shall not engage in any business or exercise any power
31 that a domestic corporation or domestic limited liability
32 company may not otherwise engage in or exercise in this
33 State. Furthermore, the surviving entity shall be governed
34 by the ownership and control restrictions in Illinois law
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1 applicable to that type of entity.
2 (805 ILCS 5/13.05) (from Ch. 32, par. 13.05)
3 Sec. 13.05. Admission of foreign corporation. A foreign
4 corporation organized for profit, before it transacts
5 business in this State, shall procure a certificate of
6 authority so to do from the Secretary of State. A foreign
7 corporation organized for profit, upon complying with the
8 provisions of this Act, may secure from the Secretary of
9 State a certificate of authority to transact business in this
10 State, but no foreign corporation shall be entitled to
11 procure a certificate of authority under this Act to act as
12 trustee, executor, administrator, administrator to collect,
13 or guardian, or in any other like fiduciary capacity in this
14 State or to transact in this State the business of banking,
15 insurance, suretyship, or a business of the character of a
16 building and loan corporation; provided, however, that a
17 foreign corporation may obtain a certificate of authority
18 under this Act for the purpose of carrying on the business of
19 a syndicate or limited syndicate under Article V-1/2 of the
20 Illinois Insurance Code or for the purpose of carrying on
21 business as a member of a group including incorporated and
22 individual unincorporated underwriters under Article V of the
23 Illinois Insurance Code. A foreign professional service
24 corporation may secure a certificate of authority to transact
25 business in this State from the Secretary of State upon
26 complying with this Act and demonstrating compliance with the
27 Act regulating the professional service to be rendered by the
28 professional service corporation. However, no foreign
29 professional service corporation shall be granted a
30 certificate of authority unless it complies with the
31 requirements of the Professional Service Corporation Act
32 concerning ownership and control by specified licensed
33 professionals. These professionals must be licensed in the
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1 state of domicile or this State. A foreign corporation shall
2 not be denied a certificate of authority by reason of the
3 fact that the laws of the state under which such corporation
4 is organized governing its organization and internal affairs
5 differ from the laws of this State, and nothing in this Act
6 contained shall be construed to authorize this State to
7 regulate the organization or the internal affairs of such
8 corporation.
9 (Source: P.A. 88-143; 88-535.)
10 Section 10. The Limited Liability Company Act is amended
11 by changing the heading of Articles 25 and 35 and Sections
12 1-5, 1-10, 1-25, 1-30, 1-35, 1-40, 5-1, 5-5, 5-15, 5-25,
13 5-45, 5-50, 10-1, 10-10, 10-15, 15-1, 15-5, 20-5, 25-1,
14 30-1, 30-5, 30-10, 30-20, 35-1, 35-10, 35-20, 35-30, 40-1,
15 40-5, 45-1, 45-5, 45-35, 50-1, 50-10, 50-15, and 60-1 and
16 adding Articles 13 and 37 and Sections 1-43, 15-3, 15-7,
17 15-20, 25-30, 25-35, 25-45, 25-50, 35-3, 35-4, 35-7, 35-45,
18 35-50, 35-55, 35-60, 35-65, 35-70, 45-65, 50-50, and 55-15
19 as follows:
20 (805 ILCS 180/1-5)
21 Sec. 1-5. Definitions. As used in this Act, unless the
22 context otherwise requires:
23 "Anniversary" means that day every year exactly one or
24 more years after: (i) the date the articles of organization
25 filed under Section 5-5 of this Act were filed by the Office
26 of the Secretary of State, in the case of a limited liability
27 company; or (ii) the date the application for admission to
28 transact business filed under Section 45-5 of this Act was
29 filed by the Office of the Secretary of State, in the case of
30 a foreign limited liability company.
31 "Anniversary month" means the month in which the
32 anniversary of the limited liability company occurs.
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1 "Articles of organization" means the articles of
2 organization filed by the Secretary of State for the purpose
3 of forming a limited liability company as specified in
4 Article 5.
5 "Assumed limited liability company name" means any
6 limited liability company name other than the true limited
7 liability company name, except that the identification by a
8 limited liability company of its business with a trademark or
9 service mark of which it is the owner or licensed user shall
10 not constitute the use of an assumed name under this Act.
11 "Bankruptcy" means bankruptcy under the Federal
12 Bankruptcy Code of 1978, Title 11, Chapter 7 of the United
13 States Code.
14 "Business" includes every trade, occupation, profession,
15 and other lawful purpose, whether or not carried on for
16 profit. "Book value" of a membership interest means the
17 aggregate value of a member's total contributions to capital
18 as recorded on the books of the limited liability company at
19 the time of contribution, other than contribution of services
20 or an unexecuted obligation to contribute property or perform
21 services, adjusted for additional contributions and returns
22 of contributions, but unadjusted by any operating profits or
23 losses.
24 "Contribution" means any cash, property, or services
25 rendered or a promissory note or other binding obligation to
26 contribute cash or property or to perform services, that a
27 person contributes to the limited liability company in that
28 person's capacity as a member.
29 "Court" includes every court and judge having
30 jurisdiction in a case.
31 "Debtor in bankruptcy" means a person who is the subject
32 of an order for relief under Title 11 of the United States
33 Code, a comparable order under a successor statute of general
34 application, or a comparable order under federal, state, or
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1 foreign law governing insolvency.
2 "Distribution" means a transfer of money, property, or
3 other benefit from "Foreign limited liability company" means
4 either (1) an unincorporated entity formed under a statute of
5 a jurisdiction within the United States comparable to this
6 Act or (2) if formed under a statute of a foreign country, an
7 entity having characteristics substantially similar to those
8 of a limited liability company to a member in the member's
9 capacity as a member or to a transferee of the member's
10 distributional interest. as determined by the Secretary of
11 State.
12 "Distributional interest" means all of a member's
13 interest in distributions by the limited liability company.
14 "Entity" means a person other than an individual.
15 "Federal employer identification number" means either (i)
16 the federal employer identification number assigned by the
17 Internal Revenue Service to the limited liability company or
18 foreign limited liability company or (ii) in the case of a
19 limited liability company or foreign limited liability
20 company not required to have a federal employer
21 identification number, any other number that may be assigned
22 by the Internal Revenue Service for purposes of
23 identification.
24 "Foreign limited liability company" means an
25 unincorporated entity organized under laws other than the
26 laws of this State that afford limited liability to its
27 owners comparable to the liability under Section 10-10 and is
28 not required to register to transact business under any law
29 of this State other than this Act.
30 "Insolvent" means that a limited liability company is
31 unable to pay its debts as they become due in the usual
32 course of its business.
33 "Limited liability company" or "company" means a limited
34 liability company organized and existing under this Act.
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1 "Manager" means a person, whether or not a member of a
2 manager-managed company, who is vested with authority under
3 Section 13-5. person elected by the members of a limited
4 liability company to manage the company pursuant to Section
5 15-1.
6 "Manager-managed company" means a limited liability
7 company which is so designated in its articles of
8 organization.
9 "Member" means a person who becomes a member of the
10 limited liability company upon formation of the company or in
11 the manner and at the time provided in the operating
12 agreement or, if the operating agreement does not so provide,
13 in the manner and at the time provided in this Act with an
14 ownership interest in a limited liability company with the
15 rights and obligations specified under this Article.
16 "Member-managed company" means a limited liability
17 company other than a manager-managed company.
18 "Membership interest" means a member's rights in the
19 limited liability company, including the member's share of
20 the profits and losses of the limited liability company and
21 the right to receive distributions of the limited liability
22 company's assets.
23 "Operating agreement" means the agreement under Section
24 15-5 concerning the relations among the members, managers,
25 and any valid agreement, written or oral, of the members as
26 to the affairs of a limited liability company. The term
27 "operating agreement" includes amendments to the agreement.
28 and the conduct of its business.
29 "Organizer" means one of the signers of the original
30 articles of organization.
31 "Person" means an individual, partnership, domestic or
32 foreign limited partnership, limited liability company or
33 foreign limited liability company, trust, estate,
34 association, corporation, governmental body, or other
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1 juridical being.
2 "Registered office" means that office maintained by the
3 limited liability company in this State, the address,
4 including street, number, city and county, of which is on
5 file in the office of the Secretary of State, at which, any
6 process, notice, or demand required or permitted by law may
7 be served upon the registered agent of the limited liability
8 company.
9 "Registered agent" means a person who is an agent for
10 service of process on the limited liability company who is
11 appointed by the limited liability company and whose address
12 is the registered office of the limited liability company.
13 "Restated articles of organization" means the articles of
14 organization restated as provided in Section 5-30.
15 "State" means a state, territory, or possession of the
16 United States, the District of Columbia, or the Commonwealth
17 of Puerto Rico.
18 "Transfer" includes an assignment, conveyance, deed, bill
19 of sale, lease, mortgage, security interest, encumbrance, and
20 gift.
21 (Source: P.A. 87-1062.)
22 (805 ILCS 180/1-10)
23 Sec. 1-10. Limited liability company name.
24 (a) The name of each limited liability company as set
25 forth in its articles of organization:
26 (1) shall contain the terms words "limited
27 liability company", or "L.L.C.", or "LLC";
28 (2) may not contain a word or phrase, or an
29 abbreviation or derivation thereof, the use of which is
30 prohibited or restricted by any other statute of this
31 State unless the restriction has been complied with;
32 (3) shall consist of letters of the English
33 alphabet, Arabic or Roman numerals, or symbols capable of
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1 being readily reproduced by the Office of the Secretary
2 of State;
3 (4) shall not contain any of the following terms:
4 "Corporation," "Corp.," "Incorporated," "Inc.," "Ltd.,"
5 "Co.," "Limited Partnership" or "L.P."; and
6 (5) shall be the name under which the limited
7 liability company transacts business in this State unless
8 the limited liability company also elects to adopt an
9 assumed name or names as provided in this Act; provided,
10 however, that the limited liability company may use any
11 divisional designation or trade name without complying
12 with the requirements of this Act, provided the limited
13 liability company also clearly discloses its name;.
14 (6) shall not contain any word or phrase that
15 indicates or implies that the limited liability company
16 is authorized or empowered to be in the business of a
17 corporate fiduciary unless otherwise permitted by the
18 Commissioner of the Office of Banks and Real Estate under
19 Section 1-9 of the Corporate Fiduciary Act. The word
20 "trust", "trustee", or "fiduciary" may be used by a
21 limited liability company only if it has first complied
22 with Section 1-9 of the Corporate Fiduciary Act; and
23 (7) shall contain the word "trust", if it is a
24 limited liability company organized for the purpose of
25 accepting and executing trusts.
26 (b) Nothing in this Section or Section 1-20 shall
27 abrogate or limit the common law or statutory law of unfair
28 competition or unfair trade practices, nor derogate from the
29 common law or principles of equity or the statutes of this
30 State or of the United States of America with respect to the
31 right to acquire and protect copyrights, trade names,
32 trademarks, service marks, service names, or any other right
33 to the exclusive use of names or symbols.
34 (c) The name shall not contain any word or phrase that
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1 indicates or implies that it is organized for any purposes
2 other than those permitted by this Act as limited by its
3 articles of organization.
4 (d) The name shall be distinguishable upon the records
5 in the Office of the Secretary of State from all of the
6 following:
7 (1) Any limited liability company that has articles
8 of organization filed with the Secretary of State under
9 Section 5-5.
10 (2) Any foreign limited liability company admitted
11 to transact business in this State.
12 (3) Any name for which an exclusive right has been
13 reserved in the Office of the Secretary of State under
14 Section 1-15.
15 (4) Any assumed name that is registered with the
16 Secretary of State under Section 1-20.
17 (e) The provisions of subsection (d) of this Section
18 shall not apply if the organizer files with the Secretary of
19 State a certified copy of a final decree of a court of
20 competent jurisdiction establishing the prior right of the
21 applicant to the use of that name in this State.
22 (f) The Secretary of State shall determine whether a
23 name is "distinguishable" from another name for the purposes
24 of this Act. Without excluding other names that may not
25 constitute distinguishable names in this State, a name is not
26 considered distinguishable, for purposes of this Act, solely
27 because it contains one or more of the following:
28 (1) The word "limited", "liability" or "company" or
29 an abbreviation of one of those words.
30 (2) Articles, conjunctions, contractions,
31 abbreviations, or different tenses or number of the same
32 word.
33 (Source: P.A. 87-1062.)
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1 (805 ILCS 180/1-25)
2 Sec. 1-25. Nature of business. A limited liability
3 company may be formed for carry on any lawful purpose or
4 business except:
5 (1) banking, exclusive of fiduciaries organized for
6 the purpose of accepting and executing trusts;
7 (2) insurance unless carried on as a business of a
8 syndicate or limited syndicate under Article V 1/2 of the
9 Illinois Insurance Code;
10 (3) the practice of dentistry unless all the
11 members and managers are licensed as dentists under the
12 Illinois Dental Practice Act; or
13 (4) the practice of medicine unless all the members
14 and managers are licensed to practice medicine under the
15 Medical Practice Act of 1987.
16 (Source: P.A. 88-573, eff. 8-11-94; 89-201, eff. 1-1-96.)
17 (805 ILCS 180/1-30)
18 Sec. 1-30. Powers. Each limited liability company
19 organized and existing under this Act may do all of the
20 following:
21 (1) Sue and be sued, complain and defend, and
22 participate in administrative or other proceedings, in its
23 name.
24 (2) Have a seal, which may be altered at pleasure, and
25 use the same by causing it, or a facsimile thereof, to be
26 impressed or affixed or in any other manner reproduced,
27 provided that the affixing of a seal to an instrument shall
28 not give the instrument additional force or effect, or change
29 the construction thereof, and the use of a seal is not
30 mandatory.
31 (3) Purchase, take, receive, lease as lessee, take by
32 gift, legacy, or otherwise acquire, own, hold, use, and
33 otherwise deal in and with any real or personal property, or
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1 any interest therein, wherever situated.
2 (4) Sell, convey, mortgage, pledge, lease as lessor, and
3 otherwise dispose of all or any part of its property and
4 assets.
5 (5) Lend money to and otherwise assist its members and
6 employees, except as otherwise provided in the operating
7 agreement or articles of organization.
8 (6) Purchase, take, receive, subscribe for or otherwise
9 acquire, own, hold, vote, use, employ, sell, mortgage, loan,
10 pledge, or otherwise dispose of, and otherwise use and deal
11 in and with, shares or other interests in or obligations of
12 other limited liability companies, domestic or foreign
13 corporations, associations, general or limited partnerships,
14 or individuals.
15 (7) Incur liabilities, borrow money for its proper
16 purposes at any rate of interest the limited liability
17 company may determine without regard to the restrictions of
18 any usury law of this State, issue notes, bonds, and other
19 obligations, secure any of its obligations by mortgage or
20 pledge or deed of trust of all or any part of its property,
21 franchises, and income, and make contracts, including
22 contracts of guaranty and suretyship.
23 (8) Invest its surplus funds from time to time, lend
24 money for its proper purposes, and take and hold real and
25 personal property as security for the payment of funds so
26 loaned or invested.
27 (9) Conduct its business, carry on its operations, have
28 offices within and without this State, and exercise in any
29 other state, territory, district, or possession of the United
30 States or in any foreign country the powers granted by this
31 Act.
32 (10) Elect managers and appoint agents of the limited
33 liability company, define their duties, and fix their
34 compensation.
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1 (11) Enter into or amend an Make and alter one or more
2 operating agreement agreements, not inconsistent with its
3 articles of organization or with the laws of this State, for
4 the administration and regulation of the affairs of the
5 limited liability company.
6 (12) Make donations for the public welfare or for
7 charitable, scientific, religious, or educational purposes,
8 lend money to the government, and transact any lawful
9 business in aid of the United States.
10 (13) Establish deferred compensation plans, pension
11 plans, profit-sharing plans, bonus plans, option plans, and
12 other incentive plans for its managers and employees and make
13 the payments provided for therein.
14 (14) Become a promoter, partner, member, associate, or
15 manager of any general partnership, limited partnership,
16 joint venture or similar association, any other limited
17 liability company, or other enterprise.
18 (15) Have and exercise all powers necessary or
19 convenient to effect any or all of the purposes for which the
20 limited liability company is organized.
21 (Source: P.A. 87-1062.)
22 (805 ILCS 180/1-35)
23 Sec. 1-35. Registered office and registered agent.
24 (a) Each limited liability company and foreign limited
25 liability company shall continuously maintain in this State a
26 registered agent and registered office, which agent must be
27 an individual resident of this State, a domestic corporation,
28 or a foreign corporation having a place of business in, and
29 authorized to do business in, this State. If the agent is a
30 corporation, the corporation must be authorized by its
31 articles of incorporation to act as an agent.
32 (b) A limited liability company or foreign limited
33 liability company may change its registered agent or the
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1 address of its registered office pursuant to Section 5-15 or
2 5-20.
3 (c) The registered agent may at any time resign by
4 filing in the Office of the Secretary of State written notice
5 thereof and by mailing a copy thereof to the limited
6 liability company or foreign limited liability company at its
7 principal office as it is known to the resigning registered
8 agent. The notice must be mailed at least 10 days before the
9 date of filing thereof with the Secretary of State. The
10 notice shall be executed by the registered agent, if an
11 individual, or by a principal officer, if the registered
12 agent is a corporation. The notice shall set forth all of
13 the following:
14 (1) The name of the limited liability company for
15 which the registered agent is acting.
16 (2) The name of the registered agent.
17 (3) The address, including street, number, city and
18 county of the limited liability company's then registered
19 office in this State.
20 (4) That the registered agent resigns.
21 (5) The effective date of the resignation, which
22 shall not be sooner than 30 days after the date of
23 filing.
24 (6) The address of the principal office of the
25 limited liability company as it is known to the
26 registered agent.
27 (7) A statement that a copy of the notice has been
28 sent by registered or certified mail to the principal
29 office of the limited liability company within the time
30 and in the manner prescribed by this Section.
31 (Source: P.A. 87-1062.)
32 (805 ILCS 180/1-40)
33 Sec. 1-40. Records to be kept.
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1 (a) Each limited liability company shall keep at the
2 registered office or the principal place of business of the
3 company named in the articles of organization or other
4 reasonable locations specified in the operating agreement all
5 of the following:
6 (1) A list of the full name and last known address
7 of each member setting forth the amount of cash each
8 member has contributed, a description and statement of
9 the agreed value of the other property or services each
10 member has contributed or has agreed to contribute in the
11 future, and the date on which each became a member.
12 (2) A copy of the articles of organization, as
13 amended or restated, together with executed copies of any
14 powers of attorney under which any articles, application,
15 or certificate has been executed.
16 (3) Copies of the limited liability company's
17 federal, State, and local income tax returns and reports,
18 if any, for the 3 most recent years.
19 (4) Copies of any then effective written operating
20 agreement and any amendments thereto and of any financial
21 statements of the limited liability company for the 3
22 most recent years.
23 (5) Unless contained in the articles of
24 organization or an operating agreement, a writing
25 prepared by a manager or managers as specifically
26 authorized by the members or, if there are no managers,
27 all of the members or the member or members that may be
28 designated by the members pursuant to limited liability
29 company action properly taken under Section 10-5, setting
30 out all of the following:
31 (A) The times at which or events on the
32 happening of which any additional contributions
33 agreed to be made by each member are to be made.
34 (B) Any right of a member to receive
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1 distributions that include a return of all or any
2 part of the member's contribution.
3 (C) Any power of a member to grant the right
4 to become a member to an assignee of any part of the
5 member's limited liability company interest, and the
6 terms and conditions of the power.
7 (b) Records kept under this Section may be inspected and
8 copied at the request and expense of any member or legal
9 representative of a deceased member or member under legal
10 disability during ordinary business hours.
11 (Source: P.A. 87-1062.)
12 (805 ILCS 180/1-43 new)
13 Sec. 1-43. Supplemental principles of law. Unless
14 displaced by particular provisions of this Act, the
15 principles of law and equity supplement this Act.
16 (805 ILCS 180/5-1)
17 Sec. 5-1. Organization.
18 (a) One or more persons, other than natural persons
19 under 18 years of age, may organize a limited liability
20 company by executing and delivering articles of organization
21 to the Secretary of State as specified in Sections 5-5 and
22 5-45. The organizers need not be members of the limited
23 liability company. Each organizer of a limited liability
24 company organized to engage in the practice of medicine shall
25 be a licensed physician of this State. The execution of the
26 articles of organization constitutes an affirmation by the
27 person, under penalty of perjury, that the facts stated
28 therein are true.
29 (b) A limited liability company shall have one 2 or more
30 members.
31 (c) A limited liability company is a legal entity
32 distinct from its members.
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1 (Source: P.A. 89-201, eff. 1-1-96.)
2 (805 ILCS 180/5-5)
3 Sec. 5-5. Articles of organization.
4 (a) The articles of organization shall set forth all of
5 the following:
6 (1) The name of the limited liability company and
7 the address of its principal place of business which may,
8 but need not be a place of business in this State.
9 (2) The purposes for which the limited liability
10 company is organized, which may be stated to be, or to
11 include, the transaction of any or all lawful businesses
12 for which limited liability companies may be organized
13 under this Act.
14 (3) The name of its registered agent and the
15 address of its registered office.
16 (4) If the limited liability company is to be
17 managed by a manager or managers, the names and business
18 addresses of the initial manager or managers.
19 (5) If management of the limited liability company
20 is to be vested in retained, in whole or in part, by the
21 members under Section 15-1, then the names and addresses
22 of the initial member or members.
23 (6) The latest date, if any, upon which the limited
24 liability company is to dissolve and other events of
25 dissolution, if any, that may be agreed upon by the
26 members under Section 35-1 hereof.
27 (7) The name and address of each organizer.
28 (8) Any other provision, not inconsistent with law,
29 that the members elect to set out in the articles of
30 organization for the regulation of the internal affairs
31 of the limited liability company, including any
32 provisions that, under this Act, are required or
33 permitted to be set out in the operating agreement of the
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1 limited liability company.
2 (b) A limited liability company is organized at the time
3 articles of organization are filed by the Secretary of State
4 or at any later time, not more than 60 days after the filing
5 of the articles of organization, specified in the articles of
6 organization.
7 (c) Articles of organization for the organization of a
8 limited liability company for the purpose of accepting and
9 executing trusts shall not be filed by the Secretary of State
10 until there is delivered to him or her a statement executed
11 by the Commissioner of the Office of Banks and Real Estate
12 that the organizers of the limited liability company have
13 made arrangements with the Commissioner of the Office of
14 Banks and Real Estate to comply with the Corporate Fiduciary
15 Act.
16 (Source: P.A. 87-1062.)
17 (805 ILCS 180/5-15)
18 Sec. 5-15. Amendment by managers. A majority of the
19 managers of a limited liability company may adopt one or more
20 amendments to its articles of organization without member
21 action to do any of the following:
22 (1) To remove the name and address of any manager named
23 in the articles of organization who is no longer a manager.
24 (2) To remove the name and address of the initial
25 registered agent or the address of the initial registered
26 office, if a statement of change is on file with the
27 Secretary of State.
28 (3) To change the company name by substituting the words
29 "limited liability company" for the abbreviation "L.L.C." or
30 "LLC" or vice versa, or by adding a geographical attribution
31 to the name.
32 (4) To restate its articles of organization as currently
33 amended; such articles supersede the original articles and
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1 all amendments thereto.
2 (Source: P.A. 87-1062.)
3 (805 ILCS 180/5-25)
4 Sec. 5-25. Articles of amendment. The articles of
5 amendment shall be executed and filed in duplicate and shall
6 set forth the following:
7 (1) The name of the limited liability company.
8 (2) The text of each amendment adopted.
9 (3) When the amendment was adopted by the managers:
10 (A) a statement that the amendment was approved by
11 not less than the minimum number of managers necessary to
12 approve the amendment adopted by a majority of the
13 managers; and
14 (B) a statement that member action was not
15 required.
16 (4) When the amendment was adopted by the members,: a
17 statement that the amendment was approved by not less than
18 the minimum number of members necessary to approve the
19 amendment.
20 (A) a statement that the amendment was adopted at a
21 meeting of members by the affirmative vote of not less
22 than the minimum number of votes necessary to adopt the
23 amendment, as provided by the articles of organization;
24 or
25 (B) a statement that the amendment was adopted by
26 written consent signed by the members having not less
27 than the minimum number of votes necessary to adopt the
28 amendment, as provided by the articles of organization.
29 (5) The date on which the amendment is to become
30 effective, if the amendment is to become effective after the
31 date on which the articles of amendment are filed.
32 (Source: P.A. 87-1062.)
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1 (805 ILCS 180/5-45)
2 Sec. 5-45. Forms, execution, acknowledgement and filing.
3 (a) All reports required by this Act to be filed in the
4 Office of the Secretary of State shall be made on forms
5 prescribed and furnished by the Secretary of State. Forms
6 for all other documents to be filed in the Office of the
7 Secretary of State shall be furnished by the Secretary of
8 State upon request therefor, but the use thereof, unless
9 otherwise specifically prescribed in this Act, shall not be
10 mandatory.
11 (b) Whenever any provision of this Act specifically
12 requires any document to be executed by the limited liability
13 company in accordance with this Section, unless otherwise
14 specifically stated in this Act and subject to any additional
15 provisions of this Act, the document shall be executed, in
16 ink, as follows:
17 (1) The articles of organization shall be signed by
18 the organizer or organizers.
19 (2) All other documents shall be signed:
20 (A) by a manager and verified by him or her;
21 or
22 (B) if there are no managers, then by the
23 members or those of them that may be designated by a
24 majority vote of the members.
25 (c) The name of a person signing the document and the
26 capacity in which the person signs shall be stated beneath or
27 opposite the person's signature.
28 (d) The execution of any document required by this Act
29 by a member or manager constitutes an affirmation under the
30 penalties of perjury that the facts stated therein are true
31 and that the person has authority to execute the document.
32 (e) When filed in the Office of the Secretary of State,
33 an authorization, including a power of attorney, to sign a
34 record must be in writing, then sworn to, verified, or
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1 acknowledged.
2 (Source: P.A. 87-1062.)
3 (805 ILCS 180/5-50)
4 Sec. 5-50. Amendment or dissolution by judicial act. If
5 a person required by Section 5-45 to execute an amendment or
6 articles of dissolution fails or refuses to do so, any other
7 member and any transferee assignee of a limited liability
8 company interest, who is adversely affected by the failure or
9 refusal, may petition a court to direct the amendment or
10 dissolution. If the court finds that the amendment or
11 dissolution is proper and that any person so designated has
12 failed or refused to execute the amendment or articles of
13 dissolution, it shall order the Secretary of State to record
14 an appropriate amendment or dissolution.
15 (Source: P.A. 87-1062.)
16 (805 ILCS 180/10-1)
17 Sec. 10-1. Admission of members. After the filing of
18 the articles of organization, a person who acquires a
19 membership interest directly from the limited liability
20 company or is a transferee an assignee of a membership
21 interest may be admitted as a member as provided in the
22 operating agreement or in the articles of organization or, if
23 the operating agreement or articles of organization do not
24 provide for the admission of those persons, then with
25 unanimous consent of the members.
26 (Source: P.A. 87-1062.)
27 (805 ILCS 180/10-10)
28 Sec. 10-10. Liability of members and managers.
29 (a) Except as otherwise provided in subsection (d) of
30 this Section, the debts, obligations, and liabilities A
31 member of a limited liability company, whether arising in
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1 contract, tort, or otherwise, are solely the debts,
2 obligations, and liabilities of the company. A member or
3 manager is not shall be personally liable for a any act,
4 debt, obligation, or liability of the company solely by
5 reason of being or acting as a member or manager limited
6 liability company or another member or manager to the extent
7 that a shareholder of an Illinois business corporation is
8 liable in analogous circumstances under Illinois law.
9 (b) (Blank). A manager of a limited liability company
10 shall be personally liable for any act, debt, obligation, or
11 liability of the limited liability company or another manager
12 or member to the extent that a director of an Illinois
13 business corporation is liable in analogous circumstances
14 under Illinois law.
15 (c) The failure of a limited liability company to
16 observe the usual company formalities or requirements
17 relating to the exercise of its company powers or management
18 of its business is not a ground for imposing personal
19 liability on the members or managers for liabilities of the
20 company.
21 (d) All or specified members of a limited liability
22 company are liable in their capacity as members for all or
23 specified debts, obligations, or liabilities of the company
24 if:
25 (1) a provision to that effect is contained in the
26 articles of organization; and
27 (2) a member so liable has consented in writing to
28 the adoption of the provision or to be bound by the
29 provision.
30 (Source: P.A. 87-1062.)
31 (805 ILCS 180/10-15)
32 Sec. 10-15. Member's right to information Information and
33 accounting.
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1 (a) A limited liability company shall provide members
2 and their agents and attorneys access to its records,
3 including the records required to be kept under Section 1-40,
4 at the company's principal place of business or other
5 reasonable locations specified in the operating agreement.
6 The company shall provide former members and their agents and
7 attorneys access for proper purposes to records pertaining to
8 the period during which they were members. The right of
9 access provides the opportunity to inspect and copy records
10 during ordinary business hours. The company may impose a
11 reasonable charge, limited to the costs of labor and
12 material, for copies of records furnished.
13 (b) A member has the right upon written demand given to
14 the limited liability company to obtain at the company's
15 expense a copy of any written operating agreement. A member
16 of a limited liability company shall have the right to do all
17 of the following:
18 (1) To inspect and copy limited liability company
19 records required by Section 1-40 to be kept.
20 (2) To obtain from the manager or managers from time to
21 time, subject to reasonable standards which may be set forth
22 in the articles of organization, the operating agreement, or
23 otherwise established by the manager or managers, upon
24 reasonable demand for any purpose reasonably related to the
25 member's interest as a member:
26 (A) true and full information regarding the state
27 of the business and financial condition of the limited
28 liability company and any other information regarding the
29 affairs of the limited liability company; and
30 (B) promptly after becoming available, a copy of
31 the limited liability company's federal, State, and local
32 income tax returns for each year.
33 (3) To have a formal accounting of limited liability
34 company affairs whenever circumstances render it just and
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1 reasonable.
2 (Source: P.A. 87-1062.)
3 (805 ILCS 180/Art. 13 heading new)
4 Article 13. Relations of members and managers to
5 persons dealing with limited liability company
6 (805 ILCS 180/13-5 new)
7 Sec. 13-5. Agency of members and managers.
8 (a) Subject to subsections (b) and (c):
9 (1) Each member is an agent of the limited
10 liability company for the purpose of its business, and an
11 act of a member, including the signing of an instrument
12 in the company's name, for apparently carrying on, in the
13 ordinary course, the company's business or business of
14 the kind carried on by the company binds the company,
15 unless the member had no authority to act for the company
16 in the particular matter and the person with whom the
17 member was dealing knew or had notice that the member
18 lacked authority.
19 (2) An act of a member that is not apparently for
20 carrying on, in the ordinary course, the company's
21 business or business of the kind carried on by the
22 company binds the company only if the act was authorized
23 by the other members.
24 (b) Subject to subsection (c), in a manager-managed
25 company:
26 (1) A member is not an agent of the company for the
27 purpose of its business solely by reason of being a
28 member. Each manager is an agent of the company for the
29 purpose of its business, and an act of a manager,
30 including the signing of an instrument in the company's
31 name, for apparently carrying on, in the ordinary course,
32 the company's business or business of the kind carried on
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1 by the company binds the company, unless the manager had
2 no authority to act for the company in the particular
3 matter and the person with whom the manager was dealing
4 knew or had notice that the manager lacked authority.
5 (2) An act of a manager which is not apparently for
6 carrying on, in the ordinary course, the company's
7 business or business of the kind carried on by the
8 company binds the company only if the act was authorized
9 under Section 15-1.
10 (c) Unless the articles of organization limit their
11 authority, any member of a member-managed company or manager
12 of a manager-managed company may sign and deliver any
13 instrument transferring or affecting the company's interest
14 in real property. The instrument is conclusive in favor of a
15 person who gives value without knowledge of the lack of the
16 authority of the person signing and delivering the
17 instrument.
18 (805 ILCS 180/13-10 new)
19 Sec. 13-10. Limited liability company liable for member
20 or manager's actionable conduct. A limited liability company
21 is liable for loss or injury caused to a person, or for a
22 penalty incurred, as a result of a wrongful act or omission,
23 or other actionable conduct, of a member or manager acting in
24 the ordinary course of business of the company or with
25 authority of the company.
26 (805 ILCS 180/15-1)
27 Sec. 15-1. Management of limited liability company.
28 (a) In a member-managed company:
29 (1) each member has equal rights in the management
30 and conduct of the company's business; and
31 (2) except as otherwise provided in subsection (c)
32 of this Section, any matter relating to the business of
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1 the company may be decided by a majority of the members.
2 (b) In a manager-managed company:
3 (1) each manager has equal rights in the management
4 and conduct of the company's business;
5 (2) except as otherwise provided in subsection (c)
6 of this Section, any matter relating to the business of
7 the company may be exclusively decided by the manager or,
8 if there is more than one manager, by a majority of the
9 managers; and
10 (3) a manager:
11 (A) must be designated, appointed, elected,
12 removed, or replaced by a vote, approval, or consent
13 of a majority of the members; and
14 (B) holds office until a successor has been
15 elected and qualified, unless the manager sooner
16 resigns or is removed.
17 (c) The only matters of a member or manager-managed
18 company's business requiring the consent of all of the
19 members are the following:
20 (1) the amendment of the operating agreement under
21 Section 15-5;
22 (2) an amendment to the articles of organization
23 under Article 5;
24 (3) the compromise of an obligation to make a
25 contribution under Section 20-5;
26 (4) the compromise, as among members, of an
27 obligation of a member to make a contribution or return
28 money or other property paid or distributed in violation
29 of this Act;
30 (5) the making of interim distributions under
31 subsection (a) of Section 25-1, including the redemption
32 of an interest;
33 (6) the admission of a new member;
34 (7) the use of the company's property to redeem an
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1 interest subject to a charging order;
2 (8) the consent to dissolve the company under
3 subdivision (2) of subsection (a) of Section 35-1;
4 (9) a waiver of the right to have the company's
5 business wound up and the company terminated under
6 Section 35-3;
7 (10) the consent of members to merge with another
8 entity under Section 37-20; and
9 (11) the sale, lease, exchange, or other disposal
10 of all, or substantially all, of the company's property
11 with or without goodwill.
12 (d) Action requiring the consent of members or managers
13 under this Act may be taken without a meeting.
14 (e) A member or manager may appoint a proxy to vote or
15 otherwise act for the member or manager by signing an
16 appointment instrument, either personally or by the member or
17 manager's attorney-in-fact. Management of the limited
18 liability company shall be vested in its members; however, if
19 the articles of organization so provide, the management of
20 the limited liability company may be vested, in whole or in
21 part, in a manager or managers who shall be elected by the
22 members in the manner prescribed by the operating agreement
23 or articles of organization of the limited liability company.
24 A manager or managers shall have the authority and
25 responsibility accorded to them by the operating agreement or
26 articles of organization, and the members shall not have the
27 authority and responsibility accorded to the managers, unless
28 specifically retained by them in the operating agreement or
29 the articles of organization. If the articles of
30 organization do not provide for the management of the limited
31 liability company by a manager or managers, instruments and
32 documents shall be valid and binding upon the limited
33 liability company if executed by any one or more of the
34 members unless otherwise provided in the articles of
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1 organization.
2 (Source: P.A. 87-1062.)
3 (805 ILCS 180/15-3 new)
4 Sec. 15-3. General standards of member and manager's
5 conduct.
6 (a) The fiduciary duties a member owes to a
7 member-managed company and its other members include the duty
8 of loyalty and the duty of care referred to in subsections
9 (b) and (c) of this Section.
10 (b) A member's duty of loyalty to a member-managed
11 company and its other members includes the following:
12 (1) to account to the company and to hold as
13 trustee for it any property, profit, or benefit derived
14 by the member in the conduct or winding up of the
15 company's business or derived from a use by the member of
16 the company's property, including the appropriation of a
17 company's opportunity;
18 (2) to act fairly when a member deals with the
19 company in the conduct or winding up of the company's
20 business as or on behalf of a party having an interest
21 adverse to the company; and
22 (3) to refrain from competing with the company in
23 the conduct of the company's business before the
24 dissolution of the company.
25 (c) A member's duty of care to a member-managed company
26 and its other members in the conduct of a winding up of the
27 company's business is limited to refraining from engaging in
28 grossly negligent or reckless conduct, intentional
29 misconduct, or a knowing violation of law.
30 (d) A member shall discharge his or her duties to a
31 member-managed company and its other members under this Act
32 or under the operating agreement and exercise any rights
33 consistent with the obligation of good faith and fair
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1 dealing.
2 (e) A member of a member-managed company does not
3 violate a duty or obligation under this Act or under the
4 operating agreement merely because the member's conduct
5 furthers the member's own interest.
6 (f) This Section applies to a person winding up the
7 limited liability company's business as the personal or legal
8 representative of the last surviving member as if the person
9 were a member.
10 (g) In a manager-managed company:
11 (1) a member who is not also a manager owes no
12 duties to the company or to the other members solely by
13 reason of being a member;
14 (2) a manager is held to the same standards of
15 conduct prescribed for members in subsections (b), (c),
16 (d), and (e) of this Section;
17 (3) a member who pursuant to the operating
18 agreement exercises some or all of the authority of a
19 manager in the management and conduct of the company's
20 business is held to the standards of conduct in
21 subsections (b), (c), (d), and (e) of this Section to the
22 extent that the member exercises the managerial authority
23 vested in a manager by this Act; and
24 (4) a manager is relieved of liability imposed by
25 law for violations of the standards prescribed by
26 subsections (b), (c), (d), and (e) to the extent of the
27 managerial authority delegated to the members by the
28 operating agreement.
29 (805 ILCS 180/15-5)
30 Sec. 15-5. Operating agreement.
31 (a) Except as otherwise provided in subsection (b) of
32 this Section, all members of a limited liability company may
33 enter into an operating agreement to regulate the affairs of
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1 the company and the conduct of its business and to govern
2 relations among the members, managers, and company. To the
3 extent the operating agreement does not otherwise provide,
4 this Act governs relations among the members, managers, and
5 company.
6 (b) The operating agreement may not:
7 (1) unreasonably restrict a right to information or
8 access to records under Section 10-15;
9 (2) vary the right to expel a member in an event
10 specified in subdivision (6) of Section 35-45;
11 (3) vary the requirement to wind up the limited
12 liability company's business in a case specified in
13 subdivisions (3) or (4) of Section 35-1;
14 (4) restrict rights of a person, other than a
15 manager, member, and transferee of a member's
16 distributional interest, under this Act;
17 (5) restrict the power of a member to dissociate
18 under Section 35-50, although an operating agreement may
19 determine whether a dissociation is wrongful under
20 Section 35-50, and it may eliminate or vary the
21 obligation of the limited liability company to purchase
22 the dissociated member's distributional interest under
23 Section 35-60;
24 (6) eliminate or reduce a member's fiduciary
25 duties, but may;
26 (A) identify specific types or categories of
27 activities that do not violate these duties, if not
28 manifestly unreasonable; and
29 (B) specify the number or percentage of
30 members or disinterested managers that may authorize
31 or ratify, after full disclosure of all materials
32 facts, a specific act or transaction that otherwise
33 would violate these duties; or
34 (7) eliminate or reduce the obligation of good
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1 faith and fair dealing under subsection (d) of Section
2 15-3, but the operating agreement may determine the
3 standards by which the performance of the obligation is
4 to be measured, if the standards are not manifestly
5 unreasonable.
6 (c) In a limited liability company with only one member,
7 the operating agreement includes any of the following:
8 (1) Any writing, without regard to whether the
9 writing otherwise constitutes an agreement, as to the
10 company's affairs signed by the sole member.
11 (2) Any written agreement between the member and
12 the company as to the company's affairs.
13 (3) Any agreement, which need not be in writing,
14 between the member and the company as to a company's
15 affairs, provided that the company is managed by a
16 manager who is a person other than the member. The power
17 to adopt, alter, amend, or repeal the operating agreement
18 of a limited liability company shall be vested in the
19 members of the company unless vested in the manager or
20 managers of the company by the articles of organization.
21 A new operating agreement may be adopted by the members
22 unless prohibited by the articles of organization. The
23 operating agreement may contain any provisions for the
24 regulation and management of the affairs of the limited
25 liability company not inconsistent with law or the
26 articles of organization.
27 (Source: P.A. 87-1062.)
28 (805 ILCS 180/15-7 new)
29 Sec. 15-7. Member and manager's right to payments and
30 reimbursement.
31 (a) A limited liability company shall reimburse a member
32 or manager for payments made and indemnify a member or
33 manager for liabilities incurred by the member or manager in
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1 the ordinary course of the business of the company or for the
2 preservation of its business or property.
3 (b) A limited liability company shall reimburse a member
4 for an advance to the company beyond the amount of
5 contribution the member agreed to make.
6 (c) A payment or advance made by a member that gives
7 rise to an obligation of a limited liability company under
8 subsection (a) or (b) of this Section constitutes a loan to
9 the company upon which interest accrues from the date of the
10 payment or advance.
11 (d) A member is not entitled to remuneration for
12 services performed for a limited liability company, except
13 for reasonable compensation for services rendered in winding
14 up the business of the company.
15 (805 ILCS 180/15-20 new)
16 Sec. 15-20. Actions by members.
17 (a) A member may maintain an action against a limited
18 liability company or another member for legal or equitable
19 relief, with or without an accounting as to the company's
20 business, to enforce all of the following:
21 (1) The member's rights under the operating
22 agreement.
23 (2) The member's rights under this Act.
24 (3) The rights and otherwise protect the interests
25 of the member, including rights and interests arising
26 independently of the member's relationship to the
27 company.
28 (b) The accrual, and any time limited for the assertion,
29 of a right of action for a remedy under this Section is
30 governed by other law. A right to an accounting upon a
31 dissolution and winding up does not revive a claim barred by
32 law.
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1 (805 ILCS 180/20-5)
2 Sec. 20-5. Member's liability for contributions.
3 (a) (Blank). A promise by a member to contribute to the
4 limited liability company is not enforceable unless set out
5 in a writing signed by the member.
6 (b) (Blank). Except as provided in the operating
7 agreement or in the articles of organization, a member is
8 obligated to the limited liability company to perform any
9 enforceable promise to contribute cash or property or to
10 perform services, even if the member is unable to perform
11 because of death, disability, or any other reason. If a
12 member does not make the member's required contribution of
13 property or services, the member is obligated, at the option
14 of the limited liability company, to contribute cash equal to
15 that portion of the value, as stated in the limited liability
16 company records required to be kept by Section 1-40, of the
17 contribution that has not been made.
18 (c) A member's obligation to contribute money, property,
19 or other benefit to, or to perform services for, a limited
20 liability company is not excused by the member's death,
21 disability, or other inability to perform personally. If a
22 member does not make the required contribution of property or
23 services, the member is obligated at the option of the
24 company to contribute money equal to the value of that
25 portion of the stated contribution which has not been made.
26 (d) A creditor of a limited liability company who
27 extends credit or otherwise acts in reliance on an obligation
28 described in subsection (c), and without notice of any
29 compromise under subdivision (4) of subsection (c) of Section
30 15-1, may enforce the original obligation.
31 (Source: P.A. 87-1062.)
32 (805 ILCS 180/Art. 25 heading)
33 ARTICLE 25. Distributions and Resignation
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1 (805 ILCS 180/25-1)
2 Sec. 25-1. Interim distributions.
3 (a) Any distributions made by a limited liability
4 company before its dissolution and winding up must be in
5 equal shares.
6 (b) A member has no right to receive, and may not be
7 required to accept, a distribution in kind. Except as
8 provided in this Article or Article 35, a member is entitled
9 to receive distributions from a limited liability company at
10 the times or upon the happening of the events specified in
11 the articles of organization or operating agreement or as the
12 manager or managers shall specify or, if there are no
13 managers, as the members shall specify pursuant to action
14 properly taken pursuant to Section 10-5.
15 (Source: P.A. 87-1062.)
16 (805 ILCS 180/25-30 new)
17 Sec. 25-30. Limitations on distributions.
18 (a) A distribution may not be made if:
19 (1) the limited liability company would not be able
20 to pay its debts as they become due in the ordinary
21 course of business; or
22 (2) the company's total assets would be less than
23 the sum of its total liabilities plus the amount that
24 would be needed, if the company were to be dissolved,
25 wound up, and terminated at the time of the distribution,
26 to satisfy the preferential rights upon dissolution,
27 winding up, and termination of members whose preferential
28 rights are superior to those receiving the distribution.
29 (b) A limited liability company may base a determination
30 that a distribution is not prohibited under subsection (a) of
31 this Section on financial statements prepared on the basis of
32 accounting practices and principles that are reasonable in
33 the circumstances or on a fair valuation or other method that
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1 is reasonable in the circumstances.
2 (c) Except as otherwise provided in subsection (e) of
3 this Section, the effect of a distribution under subsection
4 (a) of this Section is measured:
5 (1) in the case of distribution by purchase,
6 redemption, or other acquisition of a distributional
7 interest in a limited liability company, as of the date
8 money or other property is transferred or debt incurred
9 by the company; and
10 (2) in all other cases, as of the date the:
11 (A) distribution is authorized if the payment
12 occurs within 120 days after the date of
13 authorization; or
14 (B) payment is made if it occurs more than 120
15 days after the date of authorization.
16 (d) A limited liability company's indebtedness to a
17 member incurred by reason of a distribution made in
18 accordance with this Section is at parity with the company's
19 indebtedness to its general, unsecured creditors.
20 (e) Indebtedness of a limited liability company,
21 including indebtedness issued in connection with or as part
22 of a distribution, is not considered a liability for purposes
23 of determinations under subsection (a) of this Section if its
24 terms provide that payment of principal and interest are made
25 only if and to the extent that payment of a distribution to
26 members could then be made under this Section. If the
27 indebtedness is issued as a distribution, each payment of
28 principal or interest on the indebtedness is treated as a
29 distribution, the effect of which is measured on the date the
30 payment is made.
31 (805 ILCS 180/25-35 new)
32 Sec. 25-35. Liability for unlawful distributions.
33 (a) A member of a member-managed company or a member or
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1 manager of a manager-managed company who votes for or assents
2 to a distribution made in violation of Section 25-30, the
3 articles of organization, or the operating agreement is
4 personally liable to the company for the amount of the
5 distribution that exceeds the amount that could have been
6 distributed without violating Section 25-30, the articles of
7 organization, or the operating agreement if it is established
8 that the member or manager did not perform the member or
9 manager's duties in compliance with Section 15-3.
10 (b) A member of a manager-managed company who knew a
11 distribution was made in violation of Section 25-30, the
12 articles of organization, or the operating agreement is
13 personally liable to the company, but only to the extent that
14 the distribution received by the member exceeded the amount
15 that could have been properly paid under Section 25-30.
16 (c) A member or manager against whom an action is
17 brought under this Section may implead in the action:
18 (1) all other members or managers who voted for or
19 assented to the distribution in violation of subsection
20 (a) of this Section and may compel contribution from
21 them; and
22 (2) all members who received a distribution in
23 violation of subsection (b) of this Section and may
24 compel contribution from the member in the amount
25 received in violation of subsection (b) of this Section.
26 (d) A proceeding under this Section is barred unless it
27 is commenced within 2 years after the distribution.
28 (805 ILCS 180/25-45 new)
29 Sec. 25-45. Known claims against dissolved limited
30 liability company.
31 (a) A dissolved limited liability company may dispose of
32 the known claims against it by following the procedure
33 described in this Section.
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1 (b) A dissolved limited liability company shall notify
2 its known claimants in writing of the dissolution. The
3 notice must:
4 (1) specify the information required to be included
5 in a claim;
6 (2) provide a mailing address where the claim is to
7 be sent;
8 (3) state the deadline for receipt of the claim,
9 which may not be less than 120 days after the date the
10 written notice is received by the claimant; and
11 (4) state that the claim will be barred if not
12 received by the deadline.
13 (c) A claim against a dissolved limited liability
14 company is barred if the requirements of subsection (b) of
15 this Section are met, and:
16 (1) the claim is not received by the specified
17 deadline; or
18 (2) in the case of a claim that is timely received
19 but rejected by the dissolved company, the claimant does
20 not commence a proceeding to enforce the claim within 90
21 days after the receipt of the notice of the rejection.
22 (d) For purposes of this Section, the term "claim" does
23 not include a contingent liability or a claim based on an
24 event occurring after the effective date of dissolution.
25 (805 ILCS 180/25-50 new)
26 Sec. 25-50. Other claims against dissolved limited
27 liability company.
28 (a) A dissolved limited liability company may publish
29 notice of its dissolution and request persons having claims
30 against the company to present them in accordance with the
31 notice.
32 (b) The notice must:
33 (1) be published at least once in a newspaper of
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1 general circulation in the county in which the dissolved
2 limited liability company's principal office is located
3 or, if none in this State, in which its designated office
4 is or was last located;
5 (2) describe the information required to be
6 contained in a claim and provide a mailing address where
7 the claim is to be sent; and
8 (3) state that a claim against the limited
9 liability company is barred unless a proceeding to
10 enforce the claim is commenced within 5 years after
11 publication of the notice.
12 (c) If a dissolved limited liability company publishes a
13 notice in accordance with subsection (b) of this Section, the
14 claim of each of the following claimants is barred unless the
15 claimant commences a proceeding to enforce the claim against
16 the dissolved company within 5 years after the publication
17 date of the notice:
18 (1) a claimant who did not receive written notice
19 under Section 25-45;
20 (2) a claimant whose claim was timely sent to the
21 dissolved company but not acted on; and
22 (3) a claimant whose claim is contingent or based
23 on an event occurring after the effective date of
24 dissolution.
25 (d) A claim not barred under this Section may be
26 enforced:
27 (1) against the dissolved limited liability
28 company, to the extent of its undistributed assets; or
29 (2) if the assets have been distributed in
30 liquidation, against a member of the dissolved company to
31 the extent of the member's proportionate share of the
32 claim or the company's assets distributed to the member
33 in liquidation, whichever is less, but a member's total
34 liability for all claims under this Section may not
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1 exceed the total amount of assets distributed to the
2 member.
3 (805 ILCS 180/30-1)
4 Sec. 30-1. Member's distributional Nature of membership
5 interest.
6 (a) A member is not a co-owner of, and has no
7 transferable interest in, property of a limited liability
8 company.
9 (b) A distributional interest in a limited liability
10 company is personal property and, subject to Sections 30-5
11 and 30-10, may be transferred in whole or in part.
12 (c) An operating agreement may provide that a
13 distributional interest may be evidenced by a certificate of
14 the interest issued by the limited liability company and,
15 subject to Section 30-10, may also provide for the transfer
16 of any interest represented by the certificate. The interest
17 of each member in a limited liability company is personal
18 property.
19 (Source: P.A. 87-1062.)
20 (805 ILCS 180/30-5)
21 Sec. 30-5. Transfer of a distributional Assignment of
22 membership interest. A transfer of a distributional interest
23 does not entitle the transferee to become or to exercise any
24 rights of a member. A transfer entitles the transferee to
25 receive, to the extent transferred, only the distributions to
26 which the transferor would be entitled. Unless provided
27 otherwise in the articles of organization or the operating
28 agreement, if the members of the limited liability company,
29 other than the member proposing to dispose of the interest,
30 do not approve of the proposed transfer or assignment by
31 unanimous consent, the transferee or assignee of the interest
32 shall have no right to participate in the management of the
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1 business and affairs of the limited liability company or to
2 become a member.
3 (Source: P.A. 87-1062.)
4 (805 ILCS 180/30-10)
5 Sec. 30-10. Rights of a transferee assignee.
6 (a) A transferee of a distributional interest may become
7 a member of a limited liability company if and to the extent
8 that the transferor gives the transferee the right in
9 accordance with authority described in the operating
10 agreement or all other members consent.
11 (b) A transferee who has become a member, to the extent
12 transferred, has the rights and powers, and is subject to the
13 restrictions and liabilities, of a member under the operating
14 agreement of a limited liability company and this Act. A
15 transferee who becomes a member also is liable for the
16 transferor member's obligations to make contributions under
17 Section 20-5 and for obligations under Section 25-35 to
18 return unlawful distributions, but the transferee is not
19 obligated for the transferor member's liabilities unknown to
20 the transferee at the time the transferee becomes a member.
21 (c) Whether or not a transferee of a distributional
22 interest becomes a member under subsection (a) of this
23 Section, the transferor is not released from liability to the
24 limited liability company under the operating agreement or
25 this Act.
26 (d) A transferee who does not become a member is not
27 entitled to participate in the management or conduct of the
28 limited liability company's business, require access to
29 information concerning the company's transactions, or inspect
30 or copy any of the company's records.
31 (e) A transferee who does not become a member is
32 entitled to:
33 (1) receive, in accordance with the transfer,
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1 distributions to which the transferor would otherwise be
2 entitled;
3 (2) receive, upon dissolution and winding up of the
4 limited liability company's business:
5 (A) in accordance with the transfer, the net
6 amount otherwise distributable to the transferor;
7 and
8 (B) a statement of account only from the date
9 of the latest statement of account agreed to by all
10 the members; and
11 (3) seek under subdivision (6) of Section 35-1 a
12 judicial determination that it is equitable to dissolve
13 and wind up the company's business.
14 (f) A limited liability company need not give effect to
15 a transfer until it has notice of the transfer. A transferee
16 or assignee of a membership interest who does not become a
17 substituted member shall be entitled to receive only the
18 share of profits or other compensation by way of income and
19 the return of contributions to which that member otherwise
20 would be entitled.
21 (Source: P.A. 87-1062.)
22 (805 ILCS 180/30-20)
23 Sec. 30-20. Rights of creditor of a member.
24 (a) On application by a judgment creditor of a member of
25 a limited liability company or of a member's transferee, a
26 court having jurisdiction may charge the distributional
27 interest of the judgment debtor to satisfy the judgment. The
28 court may appoint a receiver of the share of the
29 distributions due or to become due to the judgment debtor and
30 make all other orders, directions, accounts, and inquiries
31 the judgment debtor might have made or which the
32 circumstances may require to give effect to the charging
33 order.
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1 (b) A charging order constitutes a lien on the judgment
2 debtor's distributional interest. The court may order a
3 foreclosure of a lien on a distributional interest subject to
4 the charging order at any time. A purchaser at the
5 foreclosure sale has the rights of a transferee.
6 (c) at any time before foreclosure, a distributional
7 interest in a limited liability company that is charged may
8 be redeemed:
9 (1) by the judgment debtor;
10 (2) with property other than the company's
11 property, by one or more of the other members; or
12 (3) with the company's property, but only if
13 permitted by the operating agreement.
14 (d) This Act does not affect a member's right under
15 exemption laws with respect to the member's distributional
16 interest in a limited liability company.
17 (e) This Section provides the exclusive remedy by which
18 a judgment creditor of a member or a transferee may satisfy a
19 judgment out of the judgment debtor's distributional interest
20 in a limited liability company. On application to a court of
21 competent jurisdiction by any judgment creditor of a member,
22 the court may charge the member's share of profits and right
23 to distributions with payment of the unsatisfied amount of
24 the judgment with interest. To the extent so charged, the
25 judgment creditor has only the rights of an assignee. This
26 Article shall not deprive any member of the benefit of any
27 exemption laws applicable to his interest in the limited
28 liability company.
29 (Source: P.A. 87-1062.)
30 (805 ILCS 180/Art. 35 heading)
31 Article 35. Dissolution and Dissociation
32 (805 ILCS 180/35-1)
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1 Sec. 35-1. Events causing dissolution and winding up of
2 company's business. A limited liability company is dissolved,
3 and, unless continued pursuant to subsection (b) of Section
4 35-3, its business must be wound up, upon the occurrence of
5 any of the following events:
6 (1) An event specified in the operating agreement.
7 (2) Consent of the number or percentage of members
8 specified in the operating agreement.
9 (3) An event that makes it unlawful for all or
10 substantially all of the business of the company to be
11 continued, but any cure of illegality within 90 days after
12 notice to the company of the event is effective retroactively
13 to the date of the event for purposes of this Section.
14 (4) On application by a member or a dissociated member,
15 upon entry of a judicial decree that:
16 (A) the economic purpose of the company is likely
17 to be unreasonably frustrated;
18 (B) another member has engaged in conduct relating
19 to the company's business that makes it not reasonably
20 practicable to carry on the company's business with that
21 member;
22 (C) it is not otherwise reasonably practicable to
23 carry on the company's business in conformity with the
24 articles of organization and the operating agreement;
25 (D) the company failed to purchase the petitioner's
26 distributional interest as required by Section 35-60; or
27 (E) the managers or members in control of the
28 company have acted, are acting, or will act in a manner
29 that is illegal, oppressive, or fraudulent with respect
30 to the petitioner.
31 (5) On application by a transferee of a member's
32 interest, a judicial determination that it is equitable to
33 wind up the company's business.
34 (6) Administrative dissolution under Section 35-25. A
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1 limited liability company organized under this Act shall be
2 dissolved and its affairs shall be wound up upon the
3 happening of the first to occur of any of the following
4 events:
5 (1) At the time or upon the happening of events
6 specified in the articles of organization.
7 (2) Upon the agreement of the members, which shall be in
8 writing and, unless otherwise provided in the articles of
9 organization, unanimous.
10 (3) Unless provided otherwise in the articles of
11 organization or the operating agreement, upon the death,
12 retirement, resignation, bankruptcy, court declaration of
13 incompetence with respect to, or dissolution of, a member or
14 upon the occurrence of any other event that terminates the
15 continued membership of a member in the limited liability
16 company, unless within 90 days after the event there are at
17 least 2 remaining members and all the remaining members agree
18 to continue the business of the limited liability company.
19 (4) Entry of a decree of judicial dissolution under
20 Section 35-5.
21 (5) Administrative dissolution under Section 35-25.
22 (Source: P.A. 87-1062.)
23 (805 ILCS 180/35-3 new)
24 Sec. 35-3. Limited liability company continues after
25 dissolution.
26 (a) Subject to subsection (b) of this Section, a limited
27 liability company continues after dissolution only for the
28 purpose of winding up its business.
29 (b) At any time after the dissolution of a limited
30 liability company and before the winding up of its business
31 is completed, the members, including a dissociated member
32 whose dissociation caused the dissolution, may unanimously
33 waive the right to have the company's business wound up and
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1 the company terminated. In that case:
2 (1) the limited liability company resumes carrying
3 on its business as if dissolution had never occurred and
4 any liability incurred by the company or a member after
5 the dissolution and before the waiver is determined as if
6 the dissolution had never occurred; and
7 (2) the rights of a third party accruing under
8 subsection (a) of Section 35-7 or arising out of conduct
9 in reliance on the dissolution before the third party
10 knew or received a notification of the waiver are not
11 adversely affected.
12 (805 ILCS 180/35-4 new)
13 Sec. 35-4. Right to wind up limited liability company's
14 business.
15 (a) After dissolution, a member who has not wrongfully
16 dissociated may participate in winding up a limited liability
17 company's business, but on application of any member,
18 member's legal representative, or transferee, the Circuit
19 Court, for good cause shown, may order judicial supervision
20 of the winding up.
21 (b) A legal representative of the last surviving member
22 may wind up a limited liability company's business.
23 (c) A person winding up a limited liability company's
24 business may preserve the company's business or property as a
25 going concern for a reasonable time, prosecute and defend
26 actions and proceedings, whether civil, criminal, or
27 administrative, settle and close the company's business,
28 dispose of and transfer the company's property, discharge the
29 company's liabilities, distribute the assets of the company
30 pursuant to Section 35-10, settle disputes by mediation or
31 arbitration, and perform other necessary acts.
32 (805 ILCS 180/35-7 new)
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1 Sec. 35-7. Member or manager's power and liability as
2 agent after dissolution.
3 (a) A limited liability company is bound by a member or
4 manager's act after dissolution that:
5 (1) is appropriate for winding up the company's
6 business; or
7 (2) would have bound the company under Section 13-5
8 before dissolution, if the other party to the transaction
9 did not have notice of the dissolution.
10 (b) A member or manager who, with knowledge of the
11 dissolution, subjects a limited liability company to
12 liability by an act that is not appropriate for winding up
13 the company's business is liable to the company for any
14 damage caused to the company arising from the liability.
15 (805 ILCS 180/35-10)
16 Sec. 35-10. Distribution of assets in winding up limited
17 liability company's business upon dissolution.
18 (a) In winding up a limited liability company's
19 business, the assets of the company must be applied to
20 discharge its obligations to creditors, including members who
21 are creditors. Any surplus must be applied to pay in money
22 the net amount distributable to members in accordance with
23 their right to distributions under subsection (b) of this
24 Section.
25 (b) Each member is entitled to a distribution upon the
26 winding up of the limited liability company's business,
27 consisting of a return of all contributions that have not
28 previously been returned and a distribution of any remainder
29 in equal shares. Upon the winding up of a limited liability
30 company, the assets shall be distributed in the following
31 order:
32 (1) to creditors, including members who are creditors,
33 to the extent permitted by law, in satisfaction of
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1 liabilities of the limited liability company other than
2 liabilities for distributions to members under Section 25-1
3 or 25-10;
4 (2) except as provided in the operating agreement or in
5 the articles of organization, to members and former members
6 of the limited liability company in satisfaction of the
7 limited liability company's obligations for distributions due
8 and owing under Section 25-1 or 25-10;
9 (3) except as provided in the operating agreement or in
10 the articles of organization, to members of the limited
11 liability company for the return of their contributions; and
12 (4) except as provided in the operating agreement or in
13 the articles of organization, to the members of the limited
14 liability company in the proportions in which the members
15 share in distributions under Section 20-15.
16 (Source: P.A. 87-1062.)
17 (805 ILCS 180/35-20)
18 Sec. 35-20. Filing of articles of dissolution.
19 (a) Duplicate originals of the articles of dissolution
20 shall be delivered to the Secretary of State. If the
21 Secretary of State finds that the articles of dissolution
22 conform to law, he or she shall, when all required fees have
23 been paid:
24 (1) endorse on each duplicate original the word
25 "Filed" and the date of the filing thereof; and
26 (2) file one duplicate original in his or her
27 office.
28 (b) A duplicate original of the articles of dissolution
29 shall be returned to the representative of the dissolved
30 limited liability company. Upon the filing of the articles
31 of dissolution, the existence of the company shall terminate
32 cease, and its articles of organization shall be deemed
33 cancelled, except for the purpose of suits, other
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1 proceedings, and appropriate action as provided in this
2 Article. The manager or managers or member or members at the
3 time of termination dissolution, or those that remain, shall
4 thereafter be trustee trustees for the members and creditors
5 of the terminated dissolved limited liability company and, in
6 that capacity, shall have authority to convey or distribute
7 any company property discovered after termination dissolution
8 and take any other action that may be necessary on behalf of
9 and in the name of the terminated dissolved limited liability
10 company.
11 (Source: P.A. 87-1062.)
12 (805 ILCS 180/35-30)
13 Sec. 35-30. Procedure for administrative dissolution.
14 (a) After the Secretary of State determines that one or
15 more grounds exist under Section 35-25 for the administrative
16 dissolution of a limited liability company, the Secretary of
17 State shall send a notice of delinquency by regular mail to
18 each delinquent limited liability company at its registered
19 office, or if the limited liability company has failed to
20 maintain a registered office, to the member or manager at the
21 last known office of the member or manager.
22 (b) If the limited liability company does not correct
23 the default within 90 days following the date of the notice
24 of delinquency, the Secretary of State shall thereupon
25 dissolve the limited liability company by issuing a notice of
26 dissolution that recites the grounds for dissolution and its
27 effective date. The Secretary of State shall file the
28 original of the notice in his or her office and mail one copy
29 to the limited liability company at its registered office.
30 (c) Upon the administrative dissolution of a limited
31 liability company, terminates its business existence, and a
32 dissolved limited liability company shall continue for only
33 the purpose of winding up its business. not thereafter carry
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1 on any business. However, A dissolved limited liability
2 company may take all action authorized under Section 1-30 or
3 necessary to wind up and liquidate its business and affairs
4 and terminate.
5 (Source: P.A. 87-1062.)
6 (805 ILCS 180/35-45 new)
7 Sec. 35-45. Events causing member's dissociation. A
8 member is dissociated from a limited liability company upon
9 the occurrence of any of the following events:
10 (1) The company's having notice of the member's express
11 will to withdraw upon the date of notice or on a later date
12 specified by the member.
13 (2) An event agreed to in the operating agreement as
14 causing the member's dissociation.
15 (3) Upon transfer of all of a member's distributional
16 interest, other than a transfer for security purposes or a
17 court order charging the member's distributional interest
18 that has not been foreclosed.
19 (4) The member's expulsion pursuant to the operating
20 agreement.
21 (5) The member's expulsion by unanimous vote of the
22 other members if:
23 (A) it is unlawful to carry on the company's
24 business with the member;
25 (B) there has been a transfer of substantially all
26 of the member's distributional interest, other than a
27 transfer for security purposes or a court order charging
28 the member's distributional interest that has not been
29 foreclosed;
30 (C) within 90 days after the company notifies a
31 corporate member that it will be expelled because it has
32 filed a certificate of dissolution or the equivalent, its
33 charter has been revoked, or its right to conduct
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1 business has been suspended by the jurisdiction of its
2 incorporation, the member fails to obtain a revocation of
3 the certificate of dissolution or a reinstatement of its
4 charter or its right to conduct business; or
5 (D) a partnership or a limited liability company
6 that is a member has been dissolved and its business is
7 being wound up.
8 (6) On application by the company or another member, the
9 member's expulsion by judicial determination because the
10 member:
11 (A) engaged in wrongful conduct that adversely and
12 materially affected the company's business;
13 (B) willfully or persistently committed a material
14 breach of the operating agreement or of a duty owed to the
15 company or the other members under Section 15-3; or
16 (C) engaged in conduct relating to the company's
17 business that makes it not reasonably practicable to carry on
18 the business with the member.
19 (7) The member's:
20 (A) becoming a debtor in bankruptcy;
21 (B) executing an assignment for the benefit of
22 creditors;
23 (C) seeking, consenting to, or acquiescing in the
24 appointment of a trustee, receiver, or liquidator of the
25 member or of all or substantially all of the member's
26 property; or
27 (D) failing, within 90 days after the appointment,
28 to have vacated or stayed the appointment of a trustee,
29 receiver, or liquidator of the member or of all or
30 substantially all of the member's property obtained
31 without the member's consent or acquiescence, or failing
32 within 90 days after the expiration of a stay to have the
33 appointment vacated.
34 (8) In the case of a member who is an individual:
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1 (A) the member's death;
2 (B) the appointment of a guardian or general
3 conservator for the member; or
4 (C) a judicial determination that the member has
5 otherwise become incapable of performing the member's
6 duties under the operating agreement.
7 (9) In the case of a member that is a trust or is acting
8 as a member by virtue of being a trustee of a trust,
9 distribution of the trust's entire rights to receive
10 distributions from the company, but not merely by reason of
11 the substitution of a successor trustee.
12 (10) In the case of a member that is an estate or is
13 acting as a member by virtue of being a personal
14 representative of an estate, distribution of the estate's
15 entire rights to receive distributions from the company, but
16 not merely the substitution of a successor personal
17 representative.
18 (11) Termination of the existence of a member if the
19 member is not an individual, estate, or trust other than a
20 business trust.
21 (805 ILCS 180/35-50 new)
22 Sec. 35-50. Member's power to dissociate; wrongful
23 dissociation.
24 (a) A member has the power to dissociate from a limited
25 liability company at any time, rightfully or wrongfully, by
26 express will under subdivision (1) of Section 35-45.
27 (b) The member's dissociation from a limited liability
28 company is wrongful only if it is in breach of an express
29 provision of the agreement.
30 (c) A member who wrongfully dissociates from a limited
31 liability company is liable to the company and to the other
32 members for damages caused by the dissociation. The
33 liability is in addition to any other obligation of the
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1 member to the company or to the other members.
2 (d) If a limited liability company does not dissolve and
3 wind up its business as a result of a member's wrongful
4 dissociation under subsection (b) of this Section, damages
5 sustained by the company for the wrongful dissociation must
6 be offset against distributions otherwise due the member
7 after the dissociation.
8 (805 ILCS 180/35-55 new)
9 Sec. 35-55. Effect of member's dissociation.
10 (a) Upon a member's dissociation the company must cause
11 the dissociated member's distributional interest to be
12 purchased under Section 35-60.
13 (b) Upon a member's dissociation from a limited
14 liability company:
15 (1) the member's right to participate in the
16 management and conduct of the company's business
17 terminates, except as otherwise provided in Section 35-4,
18 and the member ceases to be a member and is treated the
19 same as a transferee of a member;
20 (2) the member's fiduciary duties terminate, except
21 as provided in subdivision (3) of this subsection (b);
22 and
23 (3) the member's duty of loyalty under subdivisions
24 (1) and (2) of subsection (b) of Section 15-3 and duty of
25 care under subsection (c) of Section 15-3 continue only
26 with regard to matters arising and events occurring
27 before the member's dissociation, unless the member
28 participates in winding up the company's business
29 pursuant to Section 35-4.
30 (805 ILCS 180/35-60 new)
31 Sec. 35-60. Company purchase of distributional interest.
32 (a) A limited liability company shall purchase a
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1 distributional interest of a member for its fair value
2 determined as of the date of the member's dissociation if the
3 member's dissociation does not result in a dissolution and
4 winding up of the company's business under Section 35-1.
5 (b) A limited liability company must deliver a purchase
6 offer to the dissociated member whose distributional interest
7 is entitled to be purchased not later than 30 days after the
8 date determined under subsection (a) of this Section. The
9 purchase offer must be accompanied by:
10 (1) a statement of the company's assets and
11 liabilities as of the date determined under subsection
12 (a) of this Section;
13 (2) the latest available balance sheet and income
14 statement, if any; and
15 (3) an explanation of how the estimated amount of
16 the payment was calculated.
17 (c) If the price and other terms of a purchase of a
18 distributional interest are fixed or are to be determined by
19 the operating agreement, the price and terms so fixed or
20 determined govern the purchase unless the purchaser defaults.
21 If a default occurs, the dissociated member is entitled to
22 commence a proceeding to have the company dissolved under
23 Section 35-1.
24 (d) If an agreement to purchase the distributional
25 interest is not made within 120 days after the date
26 determined under subsection (a) of this Section, the
27 dissociated member, within another 120 days, may commence a
28 proceeding against the limited liability company to enforce
29 the purchase. The company at its expense shall notify in
30 writing all of the remaining members, and any other person
31 the court directs, of the commencement of the proceeding.
32 The jurisdiction of the court in which the proceeding is
33 commenced under this subsection (d) is plenary and exclusive.
34 (e) The court shall determine the fair value of the
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1 distributional interest in accordance with the standards set
2 forth in Section 35-65 together with the terms for the
3 purchase. Upon making these determinations, the court shall
4 order the limited liability company to purchase or cause the
5 purchase of the interest.
6 (f) Damages for wrongful dissociation under Section
7 35-50, and all other amounts owing, whether or not currently
8 due, from the dissociated member to a limited liability
9 company, must be offset against the purchase price.
10 (805 ILCS 180/35-65 new)
11 Sec. 35-65. Court action to determine fair value of
12 distributional interest.
13 (a) In an action brought to determine the fair value of
14 a distributional interest in a limited liability company, the
15 court shall:
16 (1) determine the fair value of the interest,
17 considering among other relevant evidence the going
18 concern value of the company, any agreement among some or
19 all of the members fixing the price or specifying a
20 formula for determining value of distributional interests
21 for any other purpose, the recommendations of any
22 appraiser appointed by the court, and any legal
23 constraints on the company's ability to purchase the
24 interest;
25 (2) specify the terms of the purchase, including,
26 if appropriate, terms for installment payments,
27 subordination of the purchase obligation to the rights of
28 the company's other creditors, security for a deferred
29 purchase price, and a covenant not to compete or other
30 restriction on a dissociated member; and
31 (3) require the dissociated member to deliver an
32 assignment of the interest to the purchaser upon receipt
33 of the purchase price or the first installment of the
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1 purchase price.
2 (b) After the dissociated member delivers the
3 assignment, the dissociated member has no further claim
4 against the company, its members, officers, or managers, if
5 any, other than a claim to any unpaid balance of the purchase
6 price and a claim under any agreement with the company or the
7 remaining members that is not terminated by the court.
8 (c) If the purchase is not completed in accordance with
9 the specified terms, the company shall be dissolved upon
10 application under item (D) of subdivision (4) of Section
11 35-1. If a limited liability company is so dissolved, the
12 dissociated member has the same rights and priorities in the
13 company's assets as if the sale had not been ordered.
14 (d) If the court finds that a party to the proceeding
15 acted arbitrarily, vexatiously, or not in good faith, it may
16 award one or more other parties their reasonable expenses,
17 including attorney's fees and the expenses of appraisers or
18 other experts, incurred in the proceeding. The finding may
19 be based on the company's failure to make an offer to pay or
20 to comply with Section 35-60.
21 (e) Interest must be paid on the amount awarded from the
22 date determined under subsection (a) of Section 35-60 to the
23 date of payment.
24 (805 ILCS 180/35-70 new)
25 Sec. 35-70. Dissociated member's power to bind limited
26 liability company. For 2 years after a member dissociates
27 without the dissociation resulting in a dissolution and
28 winding up of a limited liability company's business, the
29 company, including a surviving company under Article 37, is
30 bound by an act of the dissociated member that would have
31 bound the company under Section 13-5 before dissociation only
32 if at the time of entering into the transaction the other
33 party:
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1 (1) reasonably believed that the dissociated member was
2 then a member;
3 (2) did not have notice of the member's dissociation;
4 and
5 (3) is not deemed to have had notice under Section
6 35-15.
7 (805 ILCS 180/Art. 37 heading new)
8 Article 37. Conversions and mergers
9 (805 ILCS 180/37-5 new)
10 Sec. 37-5. Definitions. In this Article:
11 "Corporation" means a corporation under the Business
12 Corporation Act of 1983, a predecessor law, or comparable law
13 of another jurisdiction.
14 "General partner" means a partner in a partnership and a
15 general partner in a limited partnership.
16 "Limited partner" means a limited partner in a limited
17 partnership.
18 "Limited partnership" means a limited partnership created
19 under the Revised Uniform Limited Partnership Act, a
20 predecessor law, or comparable law of another jurisdiction.
21 "Partner" includes a general partner and a limited
22 partner.
23 "Partnership" means a general partnership under the
24 Uniform Partnership Act, a predecessor law, or comparable law
25 of another jurisdiction.
26 "Partnership agreement" means an agreement among the
27 partners concerning the partnership or limited partnership.
28 "Shareholder" means a shareholder in a corporation.
29 (805 ILCS 180/37-10 new)
30 Sec. 37-10. Conversion of partnership or limited
31 partnership to limited liability company.
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1 (a) A partnership or limited partnership may be
2 converted to a limited liability company pursuant to this
3 Section if conversion to a limited liability company is
4 permitted under the law governing the partnership or limited
5 partnership.
6 (b) The terms and conditions of a conversion of a
7 partnership or limited partnership to a limited liability
8 company must be approved by all of the partners or by a
9 number or percentage of the partners required for conversion
10 in the partnership agreement.
11 (c) An agreement of conversion must set forth the terms
12 and conditions of the conversion of the interests of partners
13 of a partnership or of a limited partnership, as the case may
14 be, into interests in the converted limited liability company
15 or the cash or other consideration to be paid or delivered as
16 a result of the conversion of the interests of the partners,
17 or a combination thereof.
18 (d) After a conversion is approved under subsection (b)
19 of this Section, the partnership or limited partnership shall
20 file articles of organization in the office of the Secretary
21 of State that satisfy the requirements of Section 5-5 and
22 contain all of the following:
23 (1) A statement that the partnership or limited
24 partnership was converted to a limited liability company
25 from a partnership or limited partnership, as the case
26 may be.
27 (2) Its former name.
28 (3) A statement of the number of votes cast by the
29 partners entitled to vote for and against the conversion
30 and, if the vote is less than unanimous, the number or
31 percentage required to approve the conversion under
32 subsection (b) of this Section.
33 (4) In the case of a limited partnership, a
34 statement that the certificate of limited partnership
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1 shall be canceled as of the date the conversion took
2 effect.
3 (e) In the case of a limited partnership, the filing of
4 articles of organization under subsection (d) of this Section
5 cancels its certificate of limited partnership as of the date
6 the conversion took effect.
7 (f) A conversion takes effect when the articles of
8 organization are filed in the office of the Secretary of
9 State or on a date specified in the articles of organization
10 not later than 30 days subsequent to the filing of the
11 articles of organization.
12 (g) A general partner who becomes a member of a limited
13 liability company as a result of a conversion remains liable
14 as a partner for an obligation incurred by the partnership or
15 limited partnership before the conversion takes effect.
16 (h) A general partner's liability for all obligations of
17 the limited liability company incurred after the conversion
18 takes effect is that of a member of the company. A limited
19 partner who becomes a member as a result of a conversion
20 remains liable only to the extent the limited partner was
21 liable for an obligation incurred by the limited partnership
22 before the conversion takes effect.
23 (805 ILCS 180/37-15 new)
24 Sec. 37-15. Effect of conversion; entity unchanged.
25 (a) A partnership or limited partnership that has been
26 converted under this Article is for all purposes the same
27 entity that existed before the conversion.
28 (b) When a conversion takes effect:
29 (1) all property owned by the converting
30 partnership or limited partnership vests in the limited
31 liability company;
32 (2) all debts, liabilities, and other obligations
33 of the converting partnership or limited partnership
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1 continue as obligations of the limited liability company;
2 (3) an action or proceeding pending by or against
3 the converting partnership or limited partnership may be
4 continued as if the conversion had not occurred;
5 (4) except as prohibited by other law, all of the
6 rights, privileges, immunities, powers, and purposes of
7 the converting partnership or limited partnership vest in
8 the limited liability company; and
9 (5) except as otherwise provided in the agreement
10 of conversion under Section 37-10, all of the partners of
11 the converting partnership continue as members of the
12 limited liability company.
13 (805 ILCS 180/37-20 new)
14 Sec. 37-20. Merger of entities.
15 (a) Pursuant to a plan of merger approved under
16 subsection (c) of this Section, a limited liability company
17 may be merged with or into one or more limited liability
18 companies, foreign limited liability companies, corporations,
19 foreign corporations, partnerships, foreign partnerships,
20 limited partnerships, foreign limited partnerships, or other
21 domestic or foreign entities if merger with or into a limited
22 liability company is permitted under the law governing the
23 domestic or foreign entity.
24 (b) A plan of merger must set forth all of the
25 following:
26 (1) The name of each entity that is a party to the
27 merger.
28 (2) The name of the surviving entity into which the
29 other entities will merge.
30 (3) The type of organization of the surviving
31 entity.
32 (4) The terms and conditions of the merger.
33 (5) The manner and basis for converting the
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1 interests, shares, obligations, or other securities of
2 each party to the merger into interests, shares,
3 obligations, or other securities of the surviving entity,
4 or into money or other property in whole or in part.
5 (6) The street address of the surviving entity's
6 principal place of business.
7 (c) A plan of merger must be approved:
8 (1) in the case of a limited liability company that
9 is a party to the merger, by all of the members or by a
10 number or percentage of members specified in the
11 operating agreement;
12 (2) in the case of a foreign limited liability
13 company that is a party to the merger, by the vote
14 required for approval of a merger by the law of the state
15 or foreign jurisdiction in which the foreign limited
16 liability company is organized;
17 (3) in the case of a partnership or domestic
18 limited partnership that is a party to the merger, by the
19 vote required for approval of a conversion under Section
20 37-5(b); and
21 (4) in the case of any other entities that are
22 parties to the merger, by the vote required for approval
23 of a merger by the law of this State or of the state or
24 foreign jurisdiction in which the entity is organized
25 and, in the absence of such a requirement, by all the
26 owners of interests in the entity.
27 (d) After a plan of merger is approved and before the
28 merger takes effect, the plan may be amended or abandoned as
29 provided in the plan.
30 (e) The merger is effective upon the filing of the
31 articles of merger with the Secretary of State, or a later
32 date as specified in the articles of merger not later than 30
33 days subsequent to the filing of the plan of merger under
34 Section 37-25.
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1 (805 ILCS 180/37-25 new)
2 Sec. 37-25. Articles of merger.
3 (a) After approval of the plan of merger under Section
4 37-20, unless the merger is abandoned under subsection (d) of
5 Section 37-20, articles of merger must be signed on behalf of
6 each limited liability company and other entity that is a
7 party to the merger and delivered to the Secretary of State
8 for filing. The articles must set forth all of the
9 following:
10 (1) The name and jurisdiction of formation or
11 organization of each of the limited liability companies
12 and other entities that are parties to the merger.
13 (2) For each limited liability company that is to
14 merge, the date its articles of organization were filed
15 with the Secretary of State.
16 (3) That a plan of merger has been approved and
17 signed by each limited liability company and other entity
18 that is to merge and, if a corporation is a party to the
19 merger, a copy of the plan as approved by the corporation
20 shall be attached to the articles.
21 (4) The name and address of the surviving limited
22 liability company or other surviving entity.
23 (5) The effective date of the merger.
24 (6) If a limited liability company is the surviving
25 entity, any changes in its articles of organization that
26 are necessary by reason of the merger.
27 (7) If a party to a merger is a foreign limited
28 liability company, the jurisdiction and date of filing of
29 its initial articles of organization and the date when
30 its application for authority was filed by the Secretary
31 of State or, if an application has not been filed, a
32 statement to that effect.
33 (8) If the surviving entity is not a limited
34 liability company, an agreement that the surviving entity
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1 may be served with process in this State and is subject
2 to liability in any action or proceeding for the
3 enforcement of any liability or obligation of any limited
4 liability company previously subject to suit in this
5 State which is to merge, and for the enforcement, as
6 provided in this Act, of the right of members of any
7 limited liability company to receive payment for their
8 interest against the surviving entity.
9 (b) If a foreign limited liability company is the
10 surviving entity of a merger, it may not do business in this
11 State until an application for that authority is filed with
12 the Secretary of State.
13 (c) The surviving limited liability company or other
14 entity shall furnish a copy of the plan of merger, on request
15 and without cost, to any member of any limited liability
16 company or any person holding an interest in any other entity
17 that is to merge.
18 (d) To the extent the articles of merger are
19 inconsistent with the limited liability company's articles of
20 organization, the articles of merger shall operate as an
21 amendment to the company's articles of organization.
22 (805 ILCS 180/37-30 new)
23 Sec. 37-30. Effect of merger.
24 (a) When a merger takes effect:
25 (1) the separate existence of each limited
26 liability company and other entity that is a party to the
27 merger, other than the surviving entity, terminates;
28 (2) all property owned by each of the limited
29 liability companies and other entities that are party to
30 the merger vests in the surviving entity;
31 (3) all debts, liabilities, and other obligations
32 of each limited liability company and other entity that
33 is party to the merger become the obligations of the
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1 surviving entity;
2 (4) an action or proceeding pending by or against a
3 limited liability company or other party to a merger may
4 be continued as if the merger had not occurred or the
5 surviving entity may be substituted as a party to the
6 action or proceeding; and
7 (5) except as prohibited by other law, all the
8 rights, privileges, immunities, powers, and purposes of
9 every limited liability company and other entity that is
10 a party to a merger vest in the surviving entity.
11 (b) The Secretary of State is an agent for service of
12 process in an action or proceeding against the surviving
13 foreign entity to enforce an obligation of any party to a
14 merger if the surviving foreign entity fails to appoint or
15 maintain an agent designated for service of process in this
16 State or the agent for service of process cannot with
17 reasonable diligence be found at the designated office.
18 Service is effected under this subsection (b) at the earliest
19 of:
20 (1) the date the company receives the process,
21 notice, or demand;
22 (2) the date shown on the return receipt, if signed
23 on behalf of the company; or
24 (3) 5 days after its deposit in the mail, if mailed
25 postpaid and correctly addressed.
26 (c) Service under subsection (b) of this Section shall
27 be made by the person instituting the action by doing all of
28 the following:
29 (1) Serving on the Secretary of State, or on any
30 employee having responsibility for administering this
31 Act, a copy of the process, notice, or demand, together
32 with any papers required by law to be delivered in
33 connection with service and paying the fee prescribed by
34 Article 50 of this Act.
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1 (2) Transmitting notice of the service on the
2 Secretary of State and a copy of the process, notice, or
3 demand and accompanying papers to the surviving entity
4 being served, by registered or certified mail at the
5 address set forth in the articles of merger.
6 (3) Attaching an affidavit of compliance with this
7 Section, in substantially the form that the Secretary of
8 State may by rule prescribe, to the process, notice, or
9 demand.
10 (d) Nothing contained in this Section shall limit or
11 affect the right to serve any process, notice, or demand
12 required or permitted by law to be served upon a limited
13 liability company in any other manner now or hereafter
14 permitted by law.
15 (e) A member of the surviving limited liability company
16 is liable for all obligations of a party to the merger for
17 which the member was personally liable before the merger.
18 (f) Unless otherwise agreed, a merger of a limited
19 liability company that is not the surviving entity in the
20 merger does not require the limited liability company to wind
21 up its business under this Act or pay its liabilities and
22 distribute its assets under this Act.
23 (805 ILCS 180/37-35 new)
24 Sec. 37-35. Article not exclusive. This Article does not
25 preclude an entity from being converted or merged under other
26 law.
27 (805 ILCS 180/40-1)
28 Sec. 40-1. Right of action. No action shall be brought
29 by a member, or transferee assignee who is entitled to
30 exercise the rights of a member to bring an action, in the
31 right of a limited liability company to recover a judgment in
32 its favor unless members or managers with authority to do so
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1 have refused to bring the action or unless an effort to cause
2 those members or managers to bring the action is not likely
3 to succeed.
4 (Source: P.A. 87-1062.)
5 (805 ILCS 180/40-5)
6 Sec. 40-5. Proper plaintiff. No action shall be brought
7 in the right of a limited liability company by a member or
8 transferee assignee who is a substituted member, unless (i)
9 the plaintiff was a member or is a transferee an assignee who
10 was a substituted member at the time of the transaction of
11 which the person complains or (ii) the person's status as a
12 member or a transferee an assignee who is a substituted
13 member had devolved upon him or her by operation of law or
14 under the terms of the operating agreement from a person who
15 was a member or a transferee an assignee who was a
16 substituted member at the time of the transaction.
17 (Source: P.A. 87-1062.)
18 (805 ILCS 180/45-1)
19 Sec. 45-1. Law governing foreign limited liability
20 companies.
21 (a) Subject to the Constitution of this State, The laws
22 of the State or other jurisdiction under which a foreign
23 limited liability company is organized shall govern its
24 organization and, internal affairs, and the liability of its
25 managers, members, and their transferees.
26 (b) A foreign limited liability company may not be
27 denied admission by reason of any difference between the
28 those laws of another jurisdiction under which the foreign
29 company is organized and the laws of this State.
30 (c) A certificate of authority does not authorize a
31 foreign limited liability company to engage in any business
32 or exercise any power that a limited liability company may
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1 not engage in or exercise in this State.
2 (Source: P.A. 87-1062.)
3 (805 ILCS 180/45-5)
4 Sec. 45-5. Admission to transact business.
5 (a) Before transacting business in this State, a foreign
6 limited liability company shall be admitted to do so by the
7 Secretary of State. In order to be admitted, a foreign
8 limited liability company shall submit to the Office of the
9 Secretary of State an application for admission to transact
10 business as a foreign limited liability company setting forth
11 all of the following:
12 (1) The name of the foreign limited liability
13 company and, if different, the name under which it
14 proposes to transact business in this State.
15 (2) The jurisdiction, date of its formation, and
16 period of duration.
17 (3) A certificate stating that the company is in
18 existence under the laws of the jurisdiction wherein it
19 is organized executed by the Secretary of State of that
20 jurisdiction or by some other official that may have
21 custody of the records pertaining to limited liability
22 companies (or affidavit from an appropriate official of
23 the jurisdiction that good standing certificates are not
24 issued or other evidence of existence which the Secretary
25 of State shall deem appropriate).
26 (4) The name and business address of the proposed
27 registered agent in this State, which registered agent
28 shall be an individual resident of this State, a domestic
29 corporation, or a foreign corporation having a place of
30 business in, and authorized to do business in, this
31 State; if the registered agent is a corporation, the
32 corporation must be authorized by its articles of
33 incorporation to act as a registered agent.
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1 (5) The address of the office required to be
2 maintained in the jurisdiction of its organization by the
3 laws of that jurisdiction or, if not so required, of the
4 principal place of business of the foreign limited
5 liability company.
6 (6) The purpose or purposes for which it was
7 organized and the purpose or purposes which it proposes
8 to conduct in the transaction of business in this State.
9 (7) A statement whether the limited liability
10 company is managed by a manager or managers or whether
11 management of the limited liability company is vested in
12 the members.
13 (8) (6) A statement that the Secretary of State is
14 appointed the agent of the foreign limited liability
15 company for service of process under the circumstances
16 set forth in subsection (b) of Section 1-50.
17 (9) (7) All additional information that may be
18 necessary or appropriate in order to enable the Secretary
19 of State to determine whether the limited liability
20 company is entitled to transact business in this State.
21 (b) No foreign limited liability company shall transact
22 in this State any business that a limited liability company
23 formed under the laws of this State is not permitted to
24 transact. A foreign limited liability company admitted to
25 transact business in this State shall, until admission is
26 revoked as provided in this Act, enjoy the same, but no
27 greater, rights and privileges as a limited liability company
28 formed under the laws of this State.
29 (c) The acceptance and filing by the Office of the
30 Secretary of State of a foreign limited liability company's
31 application shall admit the foreign limited liability company
32 to transact business in the State.
33 (Source: P.A. 87-1062.)
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1 (805 ILCS 180/45-35)
2 Sec. 45-35. Revocation of admission.
3 (a) The admission of a foreign limited liability company
4 to transact business in this State may be revoked by the
5 Secretary of State upon the occurrence of any of the
6 following events:
7 (1) The foreign limited company has failed to:
8 (A) file its limited liability company annual
9 report within the time required by Section 50-1 or
10 has failed to pay any fees or penalties prescribed
11 by this Article;
12 (B) appoint and maintain a registered agent as
13 required by this Article;
14 (C) file a report upon any change in the name
15 or business address of the registered agent; or
16 (D) file in the Office of the Secretary of
17 State any amendment to its application for admission
18 as specified in Section 45-25; or
19 (E) renew its assumed name, or to apply to
20 change its assumed name under this Act, when the
21 limited liability company may only transact business
22 within this State under its assumed name.
23 (2) A misrepresentation has been made of any
24 material matter in any application, report, affidavit, or
25 other document submitted by the foreign limited liability
26 company under this Article.
27 (b) The admission of a foreign limited liability company
28 shall not be revoked by the Secretary of State unless all of
29 the following occur:
30 (1) The Secretary of State has given the foreign
31 limited liability company not less than 60 days' notice
32 thereof by mail addressed to its registered office in
33 this State or, if the foreign limited liability company
34 fails to appoint and maintain a registered agent in this
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1 State, addressed to the office required to be maintained
2 under paragraph (5) of subsection (a) of Section 45-5.
3 (2) During that 60 day period, the foreign limited
4 liability company has failed to file the limited
5 liability company report, to pay fees or penalties, to
6 file a report of change regarding the registered agent,
7 to file any amendment, or to correct any
8 misrepresentation.
9 (c) Upon the expiration of 60 days after the mailing of
10 the notice, the admission of the foreign limited liability
11 company to transact business in this State shall cease.
12 (Source: P.A. 87-1062.)
13 (805 ILCS 180/45-65 new)
14 Sec. 45-65. Reinstatement following revocation.
15 (a) A limited liability company whose admission has been
16 revoked under Section 45-35 may be reinstated by the
17 Secretary of State within 5 years following the date of
18 issuance of the certificate of revocation upon the occurrence
19 of all of the following:
20 (1) The filing of the application for
21 reinstatement.
22 (2) The filing with the Secretary of State by the
23 limited liability company of all reports then due and
24 becoming due.
25 (3) The payment to the Secretary of State by the
26 limited liability company of all fees and penalties then
27 due and becoming due.
28 (b) The application for reinstatement shall be executed
29 and filed in duplicate in accordance with Section 5-45 and
30 shall set forth all of the following:
31 (1) The name of the limited liability company at
32 the time of the issuance of the notice of revocation.
33 (2) If the name is not available for use as
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1 determined by the Secretary of State at the time of
2 filing the application for reinstatement, the name of the
3 limited liability company as changed, provided that any
4 change is properly effected under Sections 1-10 and
5 45-25.
6 (3) The date of the issuance of the notice of
7 revocation.
8 (4) The address, including street and number or
9 rural route number of the registered office of the
10 limited liability company upon reinstatement and the name
11 of its registered agent at that address upon the
12 reinstatement of the limited liability company, provided
13 that any change from either the registered office or the
14 registered agent at the time of revocation is properly
15 reported under Section 1-35.
16 (c) When a limited liability company whose admission has
17 been revoked has complied with the provisions of this
18 Section, the Secretary of State shall issue a certificate of
19 reinstatement.
20 (d) Upon the issuance of the certificate of
21 reinstatement: (i) the admission of the limited liability
22 company to transact business in this State shall be deemed to
23 have continued without interruption from the date of the
24 issuance of the notice of revocation, (ii) the limited
25 liability company shall stand revived with the powers,
26 duties, and obligations as if its admission had not been
27 revoked, and (iii) all acts and proceedings of its members or
28 managers, acting or purporting to act in that capacity, that
29 would have been legal and valid but for the revocation, shall
30 stand ratified and confirmed.
31 (805 ILCS 180/50-1)
32 Sec. 50-1. Annual reports.
33 (a) Each limited liability company organized under the
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1 laws of this State and each foreign limited liability company
2 admitted to transact business in this State shall file,
3 within the time prescribed by this Act, an annual report
4 setting forth all of the following:
5 (1) The name of the limited liability company.
6 (2) The address, including street and number or
7 rural route number, of its registered office in this
8 State and the name of its registered agent at that
9 address and a statement of change of its registered
10 office or registered agent, or both, if any.
11 (3) The address, including street and number or
12 rural route number of its principal place of business.
13 (4) The names and addresses of its managers or, if
14 none, the members.
15 (5) Additional information that may be necessary or
16 appropriate in order to enable the Secretary of State to
17 administer this Act and to verify the proper amount of
18 fees payable by the limited liability company.
19 (6) The annual report shall be made on forms
20 prescribed and furnished by the Secretary of State, and
21 the information therein, required by paragraphs (1)
22 through (4) of subsection (a), both inclusive, shall be
23 given as of the date of execution of the annual report.
24 The annual report shall be executed by a manager or, if
25 none, a member designated by the members pursuant to
26 limited liability company action properly taken under
27 Section 15-1 10-5.
28 (b) The annual report, together with all fees and
29 charges prescribed by this Act, shall be delivered to the
30 Secretary of State within 60 days immediately preceding the
31 first day of the anniversary month. The annual report,
32 together with all fees and charges as prescribed by this Act,
33 shall be deemed to be received by the Secretary of State upon
34 the date of actual receipt thereof by the Secretary of State.
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1 If the Secretary of State finds that the report conforms to
2 the requirements of this Act, he or she shall file it. If
3 the Secretary of State finds that it does not so conform, he
4 or she shall promptly return it to the limited liability
5 company for any necessary corrections, in which event the
6 penalties prescribed for failure to file the report within
7 the time provided shall not apply if the report is corrected
8 to conform to the requirements of this Act and returned to
9 the Secretary of State within 30 days of the date the report
10 was returned for corrections.
11 (Source: P.A. 87-1062.)
12 (805 ILCS 180/50-10)
13 Sec. 50-10. Fees.
14 (a) The Secretary of State shall charge and collect in
15 accordance with the provisions of this Act and rules
16 promulgated under its authority all of the following:
17 (1) Fees for filing documents.
18 (2) Miscellaneous charges.
19 (3) Fees for the sale of lists of filings, copies
20 of any documents, and for the sale or release of any
21 information.
22 (b) The Secretary of State shall charge and collect for
23 all of the following:
24 (1) Filing articles of organization of limited
25 liability companies (domestic), application for admission
26 (foreign), and restated articles of organization
27 (domestic), $400 $500.
28 (2) Filing amendments:, $100.
29 (A) For other than change of registered agent
30 name or registered office, or both, $100.
31 (B) For the purpose of changing the registered
32 agent name or registered office, or both, $25.
33 (3) Filing articles of dissolution or application
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1 for withdrawal, $100.
2 (4) Filing an application to reserve a name, $300.
3 (5) Renewal fee for reserved name, $100.
4 (6) Filing a notice of a transfer of a reserved
5 name, $100.
6 (7) Registration of a name, $300.
7 (8) Renewal of registration of a name, $100.
8 (9) Filing an application for use of an assumed
9 name under Section 1-20 of this Act, $20 plus $5 for each
10 month or part thereof between the date of filing the
11 application and the date of the renewal of the assumed
12 name; and a renewal for each assumed name, $300.
13 (10) Filing an application for change of an assumed
14 name, $100.
15 (11) Filing an annual report of a limited liability
16 company or foreign limited liability company, $200 $300,
17 if filed as required by this Act, plus a penalty if
18 delinquent.
19 (12) Filing an application for reinstatement of a
20 limited liability company or foreign limited liability
21 company and for issuing a certificate of reinstatement,
22 $500.
23 (13) Filing Articles of Merger, $100 plus $50 for
24 each party to the merger in excess of the first 2
25 parties.
26 (14) Filing an Agreement of Conversion or Statement
27 of Conversion, $100.
28 (15) (13) Filing any other document, $100.
29 (c) The Secretary of State shall charge and collect all
30 of the following:
31 (1) For furnishing a copy or certified copy of any
32 document, instrument, or paper relating to a limited
33 liability company or foreign limited liability company,
34 $1 per page, but not less than $25, and $25 for the
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1 certificate and for affixing the seal thereto.
2 (2) For the transfer of information by computer
3 process media to any purchaser, fees established by rule.
4 (Source: P.A. 87-1062.)
5 (805 ILCS 180/50-15)
6 Sec. 50-15. Penalty.
7 (a) The Secretary of State shall declare any limited
8 liability company or foreign limited liability company to be
9 delinquent and not in good standing if any of the following
10 occur:
11 (1) It has failed to file its annual report and pay
12 the requisite fee as required by this Act before the
13 first day of the anniversary month in the year in which
14 it is due.
15 (2) It has failed to appoint and maintain a
16 registered agent in Illinois within 60 days of
17 notification of the Secretary of State by the resigning
18 registered agent.
19 (3) It has failed to report its federal employer
20 identification number to the Secretary of State within 90
21 days as specified in Section 50-30.
22 (b) If the limited liability company or foreign limited
23 liability company has not corrected the default within the
24 time periods prescribed by this Act, the Secretary of State
25 shall be empowered to invoke any of the following penalties:
26 (1) For failure or refusal to comply with
27 subsection (a) of this Section within 60 days after the
28 due date, a penalty of $100 plus increasing by $50 for
29 each additional month or fraction thereof until returned
30 to good standing or until administratively dissolved by
31 the Secretary of State.
32 (2) The Secretary of State shall not file any
33 additional documents, amendments, reports, or other
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1 papers relating to any limited liability company or
2 foreign limited liability company organized under or
3 subject to the provisions of this Act until any
4 delinquency under subsection (a) is satisfied.
5 (3) In response to inquiries received in the Office
6 of the Secretary of State from any party regarding a
7 limited liability company that is delinquent, the
8 Secretary of State may show the limited liability company
9 as not in good standing.
10 (Source: P.A. 87-1062.)
11 (805 ILCS 180/55-15 new)
12 Sec. 55-15. Transitional provisions.
13 (a) Before January 1, 2000, this amendatory Act of 1997
14 governs only a limited liability company:
15 (1) organized on or after the effective date of
16 this amendatory Act of 1997, unless the company is
17 continuing the business of a dissolved limited liability
18 company under this Act; and
19 (2) organized before the effective date of this
20 amendatory Act of 1997, that elects, as provided under
21 subsection (c) of this Section, to be governed by this
22 amendatory Act of 1997.
23 (b) On and after January 1, 2000, this amendatory Act of
24 1997 governs all limited liability companies.
25 (c) Before January 1, 2000, a limited liability company
26 voluntarily may elect, in the manner provided in its
27 operating agreement or by law for amending the operating
28 agreement, to be governed by this amendatory Act of 1997.
29 (805 ILCS 180/60-1)
30 Sec. 60-1. Effective date. This Act takes effect on
31 January 1, 1994.
32 (Source: P.A. 87-1062.)
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1 (805 ILCS 180/1-45 rep.)
2 (805 ILCS 180/5-20 rep.)
3 (805 ILCS 180/10-5 rep.)
4 (805 ILCS 180/15-10 rep.)
5 (805 ILCS 180/20-10 rep.)
6 (805 ILCS 180/20-15 rep.)
7 (805 ILCS 180/25-5 rep.)
8 (805 ILCS 180/25-10 rep.)
9 (805 ILCS 180/25-15 rep.)
10 (805 ILCS 180/25-25 rep.)
11 (805 ILCS 180/30-15 rep.)
12 (805 ILCS 180/35-5 rep.)
13 (805 ILCS 180/35-35 rep.)
14 Section 13. The Limited Liability Company Act is amended
15 by repealing Sections 1-45, 5-20, 10-5, 15-10, 20-10, 20-15,
16 25-5, 25-10, 25-15, 25-25, 30-15, 35-5, and 35-35.
17 Section 15. The Uniform Partnership Act is amended by
18 adding Sections 7.1 and 7.2 as follows:
19 (805 ILCS 205/7.1 new)
20 Sec. 7.1. Merger of partnership and limited liability
21 company.
22 (a) Under a plan of merger approved under subsection (c)
23 of this Section, any one or more partnerships of this State
24 may merge with or into one or more limited liability
25 companies of this State, any other state or states of the
26 United States, or the District of Columbia, if the laws of
27 the other state or states or the District of Columbia permit
28 the merger. The partnership or partnerships and the limited
29 liability company or companies may merge with or into a
30 partnership, which may be any one of these partnerships, or
31 they may merge with or into a limited liability company,
32 which may be any one of these limited liability companies,
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1 which shall be a partnership or limited liability company of
2 this State, any other state of the United States, or the
3 District of Columbia, which permits the merger.
4 (b) A plan of merger must set forth all of the
5 following:
6 (1) The name of each entity that is a party to the
7 merger.
8 (2) The name of the surviving entity into which the
9 other entities will merge.
10 (3) The type of organization of the surviving
11 entity.
12 (4) The terms and conditions of the merger.
13 (5) The manner and basis for converting the
14 interests of each party to the merger into interests,
15 obligations, or other securities of the surviving entity,
16 or into money or other property in whole or in part.
17 (6) The street address of the surviving entity's
18 principal place of business.
19 (c) The plan of merger required by subsection (b) of
20 this Section must be approved by each party to the merger in
21 accordance with all of the following:
22 (1) In the case of a partnership, by all of the
23 partners or by the number or percentage of the partners
24 required to approve a merger in the partnership
25 agreement.
26 (2) In the case of a limited liability company, in
27 accordance with the terms of the limited liability
28 company operating agreement, if any, and in accordance
29 with the laws under which it was formed.
30 (d) After a plan of merger is approved and before the
31 merger takes effect, the plan may be amended or abandoned as
32 provided in the plan of merger.
33 (e) If a partnership or partnerships are merging under
34 this Section, the partnership or partnerships and the limited
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1 liability company or companies that are parties to the merger
2 must sign the articles of merger. The articles of merger
3 shall be delivered to the Secretary of State of this State
4 for filing. The articles must set forth all of the
5 following:
6 (1) The name of each partnership and the name and
7 jurisdiction of organization of each limited liability
8 company that is a party to the merger.
9 (2) That a plan of merger has been approved and
10 signed by each partnership and each limited liability
11 company that is a party to the merger.
12 (3) The name and address of the surviving
13 partnership or other surviving entity.
14 (4) The effective date of the merger.
15 (5) If a party to the merger is a foreign limited
16 liability company, the jurisdiction and date of the
17 filing of its articles of organization and the date when
18 its application for authority was filed with the
19 Secretary of State of this State or, if an application
20 has not been filed, a statement to that effect.
21 (6) If the surviving entity is not a partnership or
22 limited liability company organized under the laws of
23 this State, an agreement that the surviving entity may be
24 served with process in this State and is subject to
25 liability in any action or proceeding for the enforcement
26 of any liability or obligation of any partnership
27 previously subject to suit in this State that is to
28 merge, and for the enforcement, as provided in this Act,
29 of the right of partners of any partnership to receive
30 payment for their interest against the surviving entity.
31 (f) The merger is effective upon the filing of the
32 articles of merger with the Secretary of State of this State,
33 or on a later date as specified in the articles of merger not
34 later than 30 days subsequent to the filing of the plan of
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1 merger under subsection (e) of this Section.
2 (g) When any merger becomes effective under this
3 Section:
4 (1) the separate existence of each partnership and
5 each limited liability company that is a party to the
6 merger, other than the surviving entity, terminates;
7 (2) all property owned by each partnership and each
8 limited liability company that is a party to the merger
9 vests in the surviving entity;
10 (3) all debts, liabilities, and other obligations
11 of each partnership and each limited liability company
12 that is a party to the merger become the obligations of
13 the surviving entity;
14 (4) an action or proceeding by or against a
15 partnership or limited liability company that is a party
16 to the merger may be continued as if the merger had not
17 occurred or the surviving entity may be substituted as a
18 party to the action or proceeding; and
19 (5) except as prohibited by other law, all the
20 rights, privileges, immunities, powers, and purposes of
21 each partnership and limited liability company that is a
22 party to the merger vest in the surviving entity.
23 (h) The Secretary of State of this State is an agent for
24 service of process in an action or proceeding against the
25 surviving foreign entity to enforce an obligation of any
26 party to a merger if the surviving foreign entity fails to
27 appoint or maintain an agent designated for service of
28 process in this State or the agent for service of process
29 cannot with reasonable diligence be found at the designated
30 office. Service is effected under this subsection (h) at the
31 earliest of:
32 (1) the date the surviving entity receives the
33 process notice or demand;
34 (2) the date shown on the return receipt, if signed
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1 on behalf of the surviving entity; or
2 (3) 5 days after its deposit in the mail, if mailed
3 postpaid and correctly addressed.
4 (i) Service under subsection (h) of this Section shall
5 be made by the person instituting the action by doing all of
6 the following:
7 (1) Serving on the Secretary of State of this
8 State, or on any employee having responsibility for
9 administering this Act in his or her office, a copy of
10 the process, notice, or demand, together with any papers
11 required by law to be delivered in connection with
12 service and paying the fee prescribed by Section 8.4 of
13 this Act.
14 (2) Transmitting notice of the service on the
15 Secretary of State of this State and a copy of the
16 process, notice, or demand and accompanying papers to the
17 surviving entity being served, by registered or certified
18 mail at the address set forth in the articles of merger.
19 (3) Attaching an affidavit of compliance with this
20 Section, in substantially the form that the Secretary of
21 State of this State may by rule prescribe, to the
22 process, notice, or demand.
23 (j) Nothing contained in this Section shall limit or
24 affect the right to serve any process, notice, or demand
25 required or permitted by law to be served upon a partnership
26 in any other manner now or hereafter permitted by law.
27 (k) The Secretary of State of this State shall keep, for
28 a period of 5 years from the date of service, a record of all
29 processes, notices, and demands served upon him or her under
30 this Section and shall record the time of the service and the
31 person's action with reference to the service.
32 (l) Except as provided by agreement with a person to
33 whom a general partner of a partnership is obligated, a
34 merger of a partnership that has become effective shall not
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1 affect any obligation or liability existing at the time of
2 the merger of a general partner of a partnership that is
3 merging.
4 (805 ILCS 205/7.2 new)
5 Sec. 7.2. Approval of conversion into a limited liability
6 company. A partnership may convert into a limited liability
7 company organized, formed, or created under the laws of this
8 State, upon approval of the conversion in accordance with
9 this Section. If the partnership agreement specifies the
10 manner of approving a conversion of a partnership, the
11 conversion shall be approved as specified in the partnership
12 agreement. If the partnership agreement does not specify the
13 manner of approving a conversion of a partnership and does
14 not prohibit a conversion of the partnership, the conversion
15 shall be approved in the same manner as is specified in the
16 partnership agreement for approving a merger that involves a
17 partnership as a constituent party to the merger. If the
18 partnership agreement does not specify the manner of
19 approving a merger that involves the partnership as a
20 constituent party or a conversion of a partnership and does
21 not prohibit a conversion of the partnership, the conversion
22 must be approved by all of the partners.
23 After a conversion is approved, the partnership shall
24 file articles of organization in the Office of the Secretary
25 of State in accordance with subsection (d) of Section 37-10
26 of the Limited Liability Company Act.
27 Section 20. The Revised Uniform Limited Partnership Act
28 is amended by adding Sections 210 and 211 as follows:
29 (805 ILCS 210/210 new)
30 Sec. 210. Merger of limited partnership and limited
31 liability company.
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1 (a) Under a plan of merger approved under subsection (c)
2 of this Section, any one or more limited partnerships may
3 merge with or into one or more limited liability companies of
4 this State, any other state or states of the United States,
5 or the District of Columbia, if the laws of the other state
6 or states or the District of Columbia permit the merger. The
7 limited partnership or partnerships and the limited liability
8 company or companies may merge with or into a limited
9 partnership, which may be any one of these limited
10 partnerships, or they may merge with or into a limited
11 liability company, which may be any one of these limited
12 liability companies, which shall be a limited partnership or
13 limited liability company of this State, any other state of
14 the United States, or the District of Columbia, which permits
15 the merger.
16 (b) A plan of merger must set forth all of the
17 following:
18 (1) The name of each entity that is a party to the
19 merger.
20 (2) The name of the surviving entity into which the
21 other entities will merge.
22 (3) The type of organization of the surviving
23 entity.
24 (4) The terms and conditions of the merger.
25 (5) The manner and basis for converting the
26 interests, obligations, or other securities of each party
27 to the merger into interests, obligations, or securities
28 of the surviving entity, or into money or other property
29 in whole or in part.
30 (6) The street address of the surviving entity's
31 principal place of business.
32 (c) The plan of merger required by subsection (b) of
33 this Section must be approved by each party to the merger in
34 accordance with all of the following:
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1 (1) In the case of a domestic limited partnership,
2 by all of the partners or by the number or percentage of
3 the partners required to approve a merger in the
4 partnership agreement.
5 (2) In the case of a limited liability company, in
6 accordance with the terms of the limited liability
7 company operating agreement, if any, and in accordance
8 with the laws under which it was formed.
9 (d) After a plan of merger is approved and before the
10 merger takes effect, the plan may be amended or abandoned as
11 provided in the plan of merger.
12 (e) If a limited partnership or partnerships are merging
13 under this Section, the limited partnership or partnerships
14 and the limited liability company or companies that are
15 parties to the merger must sign the articles of merger. The
16 articles of merger shall be delivered to the Secretary of
17 State of this State for filing. The articles must set forth
18 all of the following:
19 (1) The name of each limited partnership and the
20 name and jurisdiction of organization of each limited
21 liability company that is a party to the merger.
22 (2) For each limited partnership that is to merge,
23 the date its certificate of limited partnership was filed
24 with the Secretary of State.
25 (3) That a plan of merger has been approved and
26 signed by each limited partnership and each limited
27 liability company that is a party to the merger.
28 (4) The name and address of the surviving limited
29 partnership or surviving limited liability company.
30 (5) The effective date of the merger.
31 (6) If a limited partnership is the surviving
32 entity, any changes in its certificate of limited
33 partnership that are necessary by reason of the merger.
34 (7) If a party to the merger is a foreign limited
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1 liability company, the jurisdiction and date of the
2 filing of its articles of organization and the date when
3 its application for authority was filed with the
4 Secretary of State of this State or, if an application
5 has not been filed, a statement to that effect.
6 (8) If the surviving entity is not a domestic
7 limited partnership or limited liability company
8 organized under the laws of this State, an agreement that
9 the surviving entity may be served with process in this
10 State and is subject to liability in any action or
11 proceeding for the enforcement of any liability or
12 obligation of any limited partnership previously subject
13 to suit in this State that is to merge, and for the
14 enforcement, as provided in this Act, of the right of
15 partners of any limited partnership to receive payment
16 for their interest against the surviving entity.
17 (f) The merger is effective upon the filing of the
18 articles of merger with the Secretary of State of this State,
19 or on a later date as specified in the articles of merger not
20 later than 30 days subsequent to the filing of the plan of
21 merger under subsection (e) of this Section.
22 (g) Upon the merger becoming effective, articles of
23 merger shall act as a certificate of cancellation for a
24 domestic limited partnership which is not the surviving
25 entity of the merger.
26 (h) Upon the merger becoming effective, articles of
27 merger may operate as an amendment to the certificate of
28 limited partnership of the limited partnership which is the
29 surviving entity of the merger.
30 (i) When any merger becomes effective under this
31 Section:
32 (1) the separate existence of each limited
33 partnership and each limited liability company that is a
34 party to the merger, other than the surviving entity,
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1 terminates;
2 (2) all property owned by each limited partnership
3 and each limited liability company that is a party to the
4 merger vests in the surviving entity;
5 (3) all debts, liabilities, and other obligations
6 of each limited partnership and each limited liability
7 company that is a party to the merger become the
8 obligations of the surviving entity;
9 (4) an action or proceeding by or against a limited
10 partnership or limited liability company that is a party
11 to the merger may be continued as if the merger had not
12 occurred or the surviving entity may be substituted as a
13 party to the action or proceeding; and
14 (5) except as prohibited by other law, all the
15 rights, privileges, immunities, powers, and purposes of
16 each limited partnership and each limited liability
17 company that is a party to the merger vest in the
18 surviving entity.
19 (j) The Secretary of State of this State is an agent for
20 service of process in an action or proceeding against the
21 surviving foreign entity to enforce an obligation of any
22 party to a merger if the surviving foreign entity fails to
23 appoint or maintain an agent designated for service of
24 process in this State or the agent for service of process
25 cannot with reasonable diligence be found at the designated
26 office. Service is effected under this subsection (j) at the
27 earliest of:
28 (1) the date the surviving entity receives the
29 process, notice, or demand;
30 (2) the date shown on the return receipt, if signed
31 on behalf of the surviving entity; or
32 (3) 5 days after its deposit in the mail, if mailed
33 postpaid and correctly addressed.
34 (k) Service under subsection (j) of this Section shall
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1 be made by the person instituting the action by doing all of
2 the following:
3 (1) Serving on the Secretary of State of this
4 State, or on any employee having responsibility for
5 administering this Act in his or her office, a copy of
6 the process, notice, or demand, together with any papers
7 required by law to be delivered in connection with
8 service and paying the fee prescribed by subsection (b)
9 of Section 1102 of this Act.
10 (2) Transmitting notice of the service on the
11 Secretary of State of this State and a copy of the
12 process, notice, or demand and accompanying papers to the
13 surviving entity being served, by registered or certified
14 mail at the address set forth in the articles of merger.
15 (3) Attaching an affidavit of compliance with this
16 Section, in substantially the form that the Secretary of
17 State of this State may by rule prescribe, to the
18 process, notice, or demand.
19 (l) Nothing contained in this Section shall limit or
20 affect the right to serve any process, notice, or demand
21 required or permitted by law to be served upon a limited
22 partnership in any other manner now or hereafter permitted by
23 law.
24 (m) The Secretary of State of this State shall keep, for
25 a period of 5 years from the date of service, a record of all
26 processes, notices, and demands served upon him or her under
27 this Section and shall record the time of the service and the
28 person's action with reference to the service.
29 (n) Except as provided by agreement with a person to
30 whom a general partner of a limited partnership is obligated,
31 a merger of a limited partnership that has become effective
32 shall not affect any obligation or liability existing at the
33 time of the merger of a general partner of a limited
34 partnership that is merging.
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1 (o) If a limited partnership is a constituent party to a
2 merger that has become effective, but the limited partnership
3 is not the surviving entity of the merger, then a judgment
4 creditor of a general partner of the limited partnership may
5 not levy execution against the assets of the general partner
6 to satisfy a judgment based on a claim against the surviving
7 entity of the merger unless:
8 (1) a judgment based on the same claim has been
9 obtained against the surviving entity of the merger and a
10 writ of execution on the judgment has been returned
11 unsatisfied in whole or in part;
12 (2) the surviving entity of the merger is a debtor
13 in bankruptcy;
14 (3) the general partner has agreed that the
15 creditor need not exhaust the assets of the limited
16 partnership that was not the surviving entity of the
17 merger;
18 (4) the general partner has agreed that the
19 creditor need not exhaust the assets of the surviving
20 entity of the merger;
21 (5) a court grants permission to the judgment
22 creditor to levy execution against the assets of the
23 general partner based on a finding that the assets of the
24 surviving entity of the merger that are subject to
25 execution are insufficient to satisfy the judgment, that
26 exhaustion of the assets of the surviving entity of the
27 merger is excessively burdensome, or that grant of
28 permission is an appropriate exercise of the court's
29 equitable powers; or
30 (6) liability is imposed on the general partner by
31 law or contract independent of the existence of the
32 surviving entity of the merger.
33 (805 ILCS 210/211 new)
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1 Sec. 211. Approval of conversion into a limited
2 liability company. A limited partnership may convert into a
3 limited liability company organized, formed, or created under
4 the laws of this State, upon approval of the conversion in
5 accordance with this Section. If the partnership agreement
6 specifies the manner of approving a conversion of a limited
7 partnership, the conversion shall be approved as specified in
8 the partnership agreement. If the partnership agreement does
9 not specify the manner of approving a conversion of a limited
10 partnership and does not prohibit a conversion of the limited
11 partnership, the conversion shall be approved in the same
12 manner as is specified in the partnership agreement for
13 approving a merger that involves a limited partnership as a
14 constituent party to the merger. If the partnership
15 agreement does not specify the manner of approving a merger
16 that involves the limited partnership as a constituent party
17 or a conversion of a limited partnership and does not
18 prohibit a conversion of the limited partnership, the
19 conversion must be approved by all of the partners.
20 After a conversion is approved, the limited partnership
21 shall file articles of organization in the Office of the
22 Secretary of State in accordance with subsection (d) of
23 Section 37-10 of the Limited Liability Company Act.
24 Section 99. Effective date. This Act takes effect on
25 January 1, 1998.