State of Illinois
90th General Assembly
Legislation

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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
SB1020 Enrolled            -2-                 LRB9003480JSgc
 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
SB1020 Enrolled            -3-                 LRB9003480JSgc
 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
SB1020 Enrolled            -4-                 LRB9003480JSgc
 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
SB1020 Enrolled            -5-                 LRB9003480JSgc
 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
SB1020 Enrolled            -6-                 LRB9003480JSgc
 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
SB1020 Enrolled            -7-                 LRB9003480JSgc
 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
SB1020 Enrolled            -8-                 LRB9003480JSgc
 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
SB1020 Enrolled            -9-                 LRB9003480JSgc
 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
SB1020 Enrolled            -10-                LRB9003480JSgc
 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.
SB1020 Enrolled            -11-                LRB9003480JSgc
 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
SB1020 Enrolled            -12-                LRB9003480JSgc
 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.
SB1020 Enrolled            -13-                LRB9003480JSgc
 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
SB1020 Enrolled            -14-                LRB9003480JSgc
 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
SB1020 Enrolled            -15-                LRB9003480JSgc
 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
SB1020 Enrolled            -16-                LRB9003480JSgc
 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.)
SB1020 Enrolled            -17-                LRB9003480JSgc
 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
SB1020 Enrolled            -18-                LRB9003480JSgc
 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.
SB1020 Enrolled            -19-                LRB9003480JSgc
 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
SB1020 Enrolled            -20-                LRB9003480JSgc
 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.
SB1020 Enrolled            -21-                LRB9003480JSgc
 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
SB1020 Enrolled            -22-                LRB9003480JSgc
 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.
SB1020 Enrolled            -23-                LRB9003480JSgc
 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
SB1020 Enrolled            -24-                LRB9003480JSgc
 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
SB1020 Enrolled            -25-                LRB9003480JSgc
 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.)
SB1020 Enrolled            -26-                LRB9003480JSgc
 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
SB1020 Enrolled            -27-                LRB9003480JSgc
 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
SB1020 Enrolled            -28-                LRB9003480JSgc
 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.
SB1020 Enrolled            -29-                LRB9003480JSgc
 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
SB1020 Enrolled            -30-                LRB9003480JSgc
 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
SB1020 Enrolled            -31-                LRB9003480JSgc
 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
SB1020 Enrolled            -32-                LRB9003480JSgc
 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
SB1020 Enrolled            -33-                LRB9003480JSgc
 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
SB1020 Enrolled            -34-                LRB9003480JSgc
 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
SB1020 Enrolled            -35-                LRB9003480JSgc
 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
SB1020 Enrolled            -36-                LRB9003480JSgc
 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
SB1020 Enrolled            -37-                LRB9003480JSgc
 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
SB1020 Enrolled            -38-                LRB9003480JSgc
 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.
SB1020 Enrolled            -39-                LRB9003480JSgc
 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
SB1020 Enrolled            -40-                LRB9003480JSgc
 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
SB1020 Enrolled            -41-                LRB9003480JSgc
 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
SB1020 Enrolled            -42-                LRB9003480JSgc
 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
SB1020 Enrolled            -45-                LRB9003480JSgc
 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
SB1020 Enrolled            -46-                LRB9003480JSgc
 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,
SB1020 Enrolled            -47-                LRB9003480JSgc
 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.
SB1020 Enrolled            -48-                LRB9003480JSgc
 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
SB1020 Enrolled            -50-                LRB9003480JSgc
 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
SB1020 Enrolled            -51-                LRB9003480JSgc
 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
SB1020 Enrolled            -53-                LRB9003480JSgc
 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
SB1020 Enrolled            -54-                LRB9003480JSgc
 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
SB1020 Enrolled            -55-                LRB9003480JSgc
 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
SB1020 Enrolled            -71-                LRB9003480JSgc
 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
SB1020 Enrolled            -72-                LRB9003480JSgc
 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.
SB1020 Enrolled            -73-                LRB9003480JSgc
 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
SB1020 Enrolled            -75-                LRB9003480JSgc
 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
SB1020 Enrolled            -76-                LRB9003480JSgc
 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
SB1020 Enrolled            -77-                LRB9003480JSgc
 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.
SB1020 Enrolled            -78-                LRB9003480JSgc
 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
SB1020 Enrolled            -79-                LRB9003480JSgc
 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
SB1020 Enrolled            -80-                LRB9003480JSgc
 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
SB1020 Enrolled            -81-                LRB9003480JSgc
 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.)
SB1020 Enrolled            -82-                LRB9003480JSgc
 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,
SB1020 Enrolled            -83-                LRB9003480JSgc
 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
SB1020 Enrolled            -84-                LRB9003480JSgc
 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
SB1020 Enrolled            -85-                LRB9003480JSgc
 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
SB1020 Enrolled            -86-                LRB9003480JSgc
 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
SB1020 Enrolled            -87-                LRB9003480JSgc
 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.
SB1020 Enrolled            -88-                LRB9003480JSgc
 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:
SB1020 Enrolled            -89-                LRB9003480JSgc
 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
SB1020 Enrolled            -90-                LRB9003480JSgc
 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,
SB1020 Enrolled            -91-                LRB9003480JSgc
 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
SB1020 Enrolled            -92-                LRB9003480JSgc
 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.
SB1020 Enrolled            -93-                LRB9003480JSgc
 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)
SB1020 Enrolled            -94-                LRB9003480JSgc
 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.

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