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90_SB1020eng
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
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1 AN ACT concerning limited liability companies, amending
2 named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 4. The Corporate Fiduciary Act is amended by
6 changing Sections 1-5.09, 1-5.11, 1-6, and 3-2 as follows:
7 (205 ILCS 620/1-5.09) (from Ch. 17, par. 1551-5.09)
8 Sec. 1-5.09. "Person" means an individual, corporation,
9 partnership, joint venture, trust estate, limited liability
10 company, or unincorporated association.
11 (Source: P.A. 85-858.)
12 (205 ILCS 620/1-5.11) (from Ch. 17, par. 1551-5.11)
13 Sec. 1-5.11. Trust company. "Trust company" means a
14 corporation incorporated or a limited liability company
15 organized in this State that holds a certificate of authority
16 issued pursuant to this Act.
17 (Source: P.A. 89-364, eff. 8-18-95.)
18 (205 ILCS 620/1-6) (from Ch. 17, par. 1551-6)
19 Sec. 1-6. General Corporate Powers. A corporate
20 fiduciary shall have the powers:
21 (a) if it is a State bank, those powers granted under
22 Sections 3 and 5 of the Illinois Banking Act, as now or
23 hereafter amended; and
24 (b) if it is a State savings and loan association, those
25 powers granted under Sections 1-6 through 1-8 of the Illinois
26 Savings and Loan Act of 1985, as now or hereafter amended;
27 and
28 (c) if it is a corporation organized under the Business
29 Corporation Act of 1983, as now or hereafter amended, or a
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1 limited liability company organized under the Limited
2 Liability Company Act, those powers granted in Sections 4.01
3 through 4.24 of the Trusts and Trustees Act, as now or
4 hereafter amended, to the extent the exercise of such powers
5 by the corporate fiduciary are not contrary to the instrument
6 containing the appointment of the corporate fiduciary, the
7 court order appointing the corporate fiduciary or any other
8 statute specifically limiting the power of the corporate
9 fiduciary under the circumstances.
10 The Commissioner may specify powers of corporate
11 fiduciaries generally or of a particular corporate fiduciary
12 and by rule or order limit or restrict such powers of
13 corporate fiduciaries or a particular corporate fiduciary if
14 he finds the exercise of such power by corporate fiduciaries
15 generally or of the corporate fiduciary in particular may
16 tend to be an unsafe or unsound practice, or if such power is
17 otherwise not in the interest of beneficiaries of any
18 fiduciary appointment.
19 (Source: P.A. 86-754.)
20 (205 ILCS 620/3-2) (from Ch. 17, par. 1553-2)
21 Sec. 3-2. Change in control.
22 (a) Before a change may occur in the ownership of
23 outstanding stock or membership interests of any trust
24 company whether by sale and purchase, gift, bequest or
25 inheritance, or any other means, which will result in control
26 or a change in the control of the trust company or before a
27 change in the control of a holding company having control of
28 the outstanding stock or membership interests of a trust
29 company whether by sale and purchase, gift, bequest or
30 inheritance, or any other means, which will result in control
31 or a change in control of the trust company or holding
32 company, the Commissioner shall be of the opinion and find:
33 (1) that the general character of its proposed
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1 management, after the change in control, is such as to
2 assure reasonable promise of competent, successful, safe
3 and sound operation;
4 (2) that the future earnings prospects, after the
5 proposed change in control, are favorable; and
6 (3) that the prior business affairs of the persons
7 proposing to obtain control or by the proposed management
8 personnel, whether as stockholder, director, member,
9 officer, or customer, were conducted in a safe, sound,
10 and lawful manner.
11 (b) Persons desiring to purchase control of an existing
12 trust company and persons obtaining control by gift, bequest
13 or inheritance, or any other means shall submit to the
14 Commissioner:
15 (1) A statement of financial worth; and
16 (2) Satisfactory evidence that the prior business
17 affairs of the persons and the proposed management
18 personnel, whether as stockholder, director, officer, or
19 customer, were conducted in a safe, sound, and lawful
20 manner.
21 As used in this Section, the term "control" means the
22 ownership of such amount of stock or membership interests or
23 ability to direct the voting of such stock or membership
24 interests as to give power to, directly or indirectly, direct
25 or cause the direction of the management or policies of the
26 trust company. A change in ownership of stock which would
27 result in direct or indirect ownership by a stockholder or
28 member, an affiliated group of stockholders or members or a
29 holding company of less than 10% of the outstanding stock or
30 membership interests shall not be considered a change of
31 control. A change in ownership of stock or membership
32 interests which would result in direct or indirect ownership
33 by a stockholder or member, an affiliated group of
34 stockholders or members or a holding company of 20% or such
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1 lesser amount which would entitle the holder by applying
2 cumulative voting to elect one director shall be presumed to
3 constitute a change of control for purposes of this Section.
4 If there is any doubt as to whether a change in the ownership
5 or control of the outstanding stock or membership interests
6 is sufficient to result in obtaining control thereof or to
7 effect a change in the control thereof, such doubt shall be
8 resolved in favor of reporting the facts to the Commissioner.
9 (c) Whenever a bank makes a loan or loans, secured, or
10 to be secured, by 25% or more of the outstanding stock of a
11 trust company, the president or other chief executive officer
12 of the lending bank shall promptly report such fact to the
13 Commissioner upon obtaining knowledge of such loan or loans,
14 except that no report need be made in those cases where the
15 borrower has been the owner of record of the stock for a
16 period of one year or more, or the stock is that of a
17 newly-organized trust company prior to its opening.
18 (d) (1) Before a purchase of substantially all the
19 assets and an assumption of substantially all the liabilities
20 of a trust company or before a purchase of substantially all
21 the trust assets and an assumption of substantially all the
22 trust liabilities of a trust company, the Commissioner shall
23 be of the opinion and find:
24 (i) that the general character of the acquirer's
25 proposed management, after the transfer, is such as to
26 assure reasonable promise of competent, successful, safe,
27 and sound operation;
28 (ii) that the acquirer's future earnings prospects,
29 after the proposed transfer, are favorable;
30 (iii) that any prior involvement by the acquirer or
31 by the proposed management personnel, whether as
32 stockholder, director, officer, agent, or customer, was
33 conducted in a safe, sound, and lawful manner;
34 (iv) that customers' interests will not be
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1 jeopardized by the purchase and assumption; and
2 (v) that adequate provision has been made for all
3 obligations and trusts as required under Section 7-1 of
4 this Act.
5 (2) Persons desiring to purchase substantially all the
6 assets and assume substantially all the liabilities of a
7 trust company or to purchase substantially all the trust
8 assets and assume substantially all the trust liabilities of
9 a trust company shall submit to the Commissioner:
10 (i) a statement of financial worth; and
11 (ii) satisfactory evidence that the prior business
12 affairs of the persons and the proposed management
13 personnel, whether as stockholder, director, officer, or
14 customer, were conducted in a safe, sound, and lawful
15 manner.
16 As used in this Section, "substantially all" the assets
17 or liabilities or the trust assets or trust liabilities of a
18 trust company means that portion such that their transfer
19 will materially impair the ability of the trust company to
20 continue successful, safe, and sound operations or to
21 continue as a going concern.
22 (e) The reports required by subsections (a),(b), (c),
23 and (d) of this Section 3-2 shall contain the following
24 information to the extent that it is known by the person
25 making the report: (1) the number of shares involved; (2) the
26 names of the sellers (or transferors); (3) the names of the
27 purchasers (or transferees); (4) the names of the beneficial
28 owners if the shares are registered in another name; (5) the
29 purchase price; (6) the total number of shares owned by the
30 sellers (or transferors), the purchasers (or transferees) and
31 the beneficial owners both immediately before and after the
32 transaction; and, (7) in the case of a loan, the name of the
33 borrower, the amount of the loan, and the name of the trust
34 company issuing the stock securing the loan and the number of
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1 shares securing the loan. In addition to the foregoing, such
2 reports shall contain such other information as may be
3 available and which is requested by the Commissioner to
4 inform the Commissioner of the effect of the transaction upon
5 the trust company or trust companies whose stock or assets
6 and liabilities are involved.
7 (f) Whenever such a change as described in subsection
8 (a) of this Section 3-2 occurs, each trust company shall
9 report promptly to the Commissioner any changes or
10 replacement of its chief executive officer or of any director
11 occurring in the next 12 month period, including in its
12 report a statement of the past and current business and
13 professional affiliations of the new chief executive officer
14 or directors.
15 (Source: P.A. 88-408; 89-364, eff. 8-18-95.)
16 Section 5. The Business Corporation Act of 1983 is
17 amended by adding Section 11.39 as follows:
18 (805 ILCS 5/11.39 new)
19 Sec. 11.39. Merger of domestic corporation and limited
20 liability company.
21 (a) Any one or more domestic corporations may merge with
22 or into one or more limited liability companies of this
23 State, any other state or states of the United States, or the
24 District of Columbia, if the laws of the other state or
25 states or the District of Columbia permit the merger. The
26 domestic corporation or corporations and the limited
27 liability company or companies may merge with or into a
28 corporation, which may be any one of these corporations, or
29 they may merge with or into a limited liability company,
30 which may be any one of these limited liability companies,
31 which shall be a domestic corporation or limited liability
32 company of this State, any other state of the United States,
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1 or the District of Columbia, which permits the merger
2 pursuant to a plan of merger complying with and approved in
3 accordance with this Section.
4 (b) The plan of merger must set forth the following:
5 (1) The names of the domestic corporation or
6 corporations and limited liability company or companies
7 proposing to merge and the name of the domestic
8 corporation or limited liability company into which they
9 propose to merge, which is designated as the surviving
10 entity.
11 (2) The terms and conditions of the proposed merger
12 and the mode of carrying the same into effect.
13 (3) The manner and basis of converting the shares
14 of each domestic corporation and the interests of each
15 limited liability company into shares, interests,
16 obligations, other securities of the surviving entity or
17 into cash or other property or any combination of the
18 foregoing.
19 (4) In the case of a merger in which a domestic
20 corporation is the surviving entity, a statement of any
21 changes in the articles of incorporation of the surviving
22 corporation to be effected by the merger.
23 (5) Any other provisions with respect to the
24 proposed merger that are deemed necessary or desirable,
25 including provisions, if any, under which the proposed
26 merger may be abandoned prior to the filing of the
27 articles of merger by the Secretary of State of this
28 State.
29 (c) The plan required by subsection (b) of this Section
30 shall be adopted and approved by the constituent corporation
31 or corporations in the same manner as is provided in Sections
32 11.05, 11.15, and 11.20 of this Act and, in the case of a
33 limited liability company, in accordance with the terms of
34 its operating agreement, if any, and in accordance with the
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1 laws under which it was formed.
2 (d) Upon this approval, articles of merger shall be
3 executed by each constituent corporation and limited
4 liability company and filed as provided in Section 11.25 of
5 this Act and shall be recorded with respect to each
6 constituent corporation as provided in Section 11.45 of this
7 Act. The merger shall become effective for all purposes of
8 the laws of this State when and as provided in Section 11.40
9 of this Act with respect to the merger of corporations of
10 this State.
11 (e) If the surviving entity is to be governed by the
12 laws of the District of Columbia or any state other than this
13 State, it shall file with the Secretary of State of this
14 State an agreement that it may be served with process in this
15 State in any proceeding for enforcement of any obligation of
16 any constituent corporation or limited liability company of
17 this State, as well as for enforcement of any obligation of
18 the surviving corporation or limited liability company
19 arising from the merger, including any suit or other
20 proceeding to enforce the shareholders right to dissent as
21 provided in Section 11.70 of this Act, and shall irrevocably
22 appoint the Secretary of State of this State as its agent to
23 accept service of process in any such suit or other
24 proceedings.
25 (f) Section 11.50 of this Act shall, insofar as it is
26 applicable, apply to mergers between domestic corporations
27 and limited liability companies.
28 Section 10. The Limited Liability Company Act is amended
29 by changing the heading of Articles 25 and 35 and Sections
30 1-5, 1-10, 1-25, 1-30, 1-35, 1-40, 5-1, 5-5, 5-15, 5-25,
31 5-45, 5-50, 10-1, 10-10, 10-15, 15-1, 15-5, 20-5, 25-1,
32 30-1, 30-5, 30-10, 30-20, 35-1, 35-10, 35-20, 35-30, 40-1,
33 40-5, 45-1, 45-5, 45-35, 50-1, 50-10, 50-15, and 60-1 and
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1 adding Articles 13 and 37 and Sections 1-43, 15-3, 15-7,
2 15-20, 25-30, 25-35, 25-45, 25-50, 35-3, 35-4, 35-7, 35-45,
3 35-50, 35-55, 35-60, 35-65, 35-70, 45-65, 50-50, and 55-15
4 as follows:
5 (805 ILCS 180/1-5)
6 Sec. 1-5. Definitions. As used in this Act, unless the
7 context otherwise requires:
8 "Anniversary" means that day every year exactly one or
9 more years after: (i) the date the articles of organization
10 filed under Section 5-5 of this Act were filed by the Office
11 of the Secretary of State, in the case of a limited liability
12 company; or (ii) the date the application for admission to
13 transact business filed under Section 45-5 of this Act was
14 filed by the Office of the Secretary of State, in the case of
15 a foreign limited liability company.
16 "Anniversary month" means the month in which the
17 anniversary of the limited liability company occurs.
18 "Articles of organization" means the articles of
19 organization filed by the Secretary of State for the purpose
20 of forming a limited liability company as specified in
21 Article 5.
22 "Assumed limited liability company name" means any
23 limited liability company name other than the true limited
24 liability company name, except that the identification by a
25 limited liability company of its business with a trademark or
26 service mark of which it is the owner or licensed user shall
27 not constitute the use of an assumed name under this Act.
28 "Bankruptcy" means bankruptcy under the Federal
29 Bankruptcy Code of 1978, Title 11, Chapter 7 of the United
30 States Code.
31 "Business" includes every trade, occupation, profession,
32 and other lawful purpose, whether or not carried on for
33 profit. "Book value" of a membership interest means the
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1 aggregate value of a member's total contributions to capital
2 as recorded on the books of the limited liability company at
3 the time of contribution, other than contribution of services
4 or an unexecuted obligation to contribute property or perform
5 services, adjusted for additional contributions and returns
6 of contributions, but unadjusted by any operating profits or
7 losses.
8 "Contribution" means any cash, property, or services
9 rendered or a promissory note or other binding obligation to
10 contribute cash or property or to perform services, that a
11 person contributes to the limited liability company in that
12 person's capacity as a member.
13 "Court" includes every court and judge having
14 jurisdiction in a case.
15 "Debtor in bankruptcy" means a person who is the subject
16 of an order for relief under Title 11 of the United States
17 Code, a comparable order under a successor statute of general
18 application, or a comparable order under federal, state, or
19 foreign law governing insolvency.
20 "Distribution" means a transfer of money, property, or
21 other benefit from "Foreign limited liability company" means
22 either (1) an unincorporated entity formed under a statute of
23 a jurisdiction within the United States comparable to this
24 Act or (2) if formed under a statute of a foreign country, an
25 entity having characteristics substantially similar to those
26 of a limited liability company to a member in the member's
27 capacity as a member or to a transferee of the member's
28 distributional interest. as determined by the Secretary of
29 State.
30 "Distributional interest" means all of a member's
31 interest in distributions by the limited liability company.
32 "Entity" means a person other than an individual.
33 "Federal employer identification number" means either (i)
34 the federal employer identification number assigned by the
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1 Internal Revenue Service to the limited liability company or
2 foreign limited liability company or (ii) in the case of a
3 limited liability company or foreign limited liability
4 company not required to have a federal employer
5 identification number, any other number that may be assigned
6 by the Internal Revenue Service for purposes of
7 identification.
8 "Foreign limited liability company" means an
9 unincorporated entity organized under laws other than the
10 laws of this State that afford limited liability to its
11 owners comparable to the liability under Section 10-10 and is
12 not required to register to transact business under any law
13 of this State other than this Act.
14 "Insolvent" means that a limited liability company is
15 unable to pay its debts as they become due in the usual
16 course of its business.
17 "Limited liability company" or "company" means a limited
18 liability company organized and existing under this Act.
19 "Manager" means a person, whether or not a member of a
20 manager-managed company, who is vested with authority under
21 Section 13-5. person elected by the members of a limited
22 liability company to manage the company pursuant to Section
23 15-1.
24 "Manager-managed company" means a limited liability
25 company which is so designated in its articles of
26 organization.
27 "Member" means a person who becomes a member of the
28 limited liability company upon formation of the company or in
29 the manner and at the time provided in the operating
30 agreement or, if the operating agreement does not so provide,
31 in the manner and at the time provided in this Act with an
32 ownership interest in a limited liability company with the
33 rights and obligations specified under this Article.
34 "Member-managed company" means a limited liability
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1 company other than a manager-managed company.
2 "Membership interest" means a member's rights in the
3 limited liability company, including the member's share of
4 the profits and losses of the limited liability company and
5 the right to receive distributions of the limited liability
6 company's assets.
7 "Operating agreement" means the agreement under Section
8 15-5 concerning the relations among the members, managers,
9 and any valid agreement, written or oral, of the members as
10 to the affairs of a limited liability company. The term
11 "operating agreement" includes amendments to the agreement.
12 and the conduct of its business.
13 "Organizer" means one of the signers of the original
14 articles of organization.
15 "Person" means an individual, partnership, domestic or
16 foreign limited partnership, limited liability company or
17 foreign limited liability company, trust, estate,
18 association, corporation, governmental body, or other
19 juridical being.
20 "Registered office" means that office maintained by the
21 limited liability company in this State, the address,
22 including street, number, city and county, of which is on
23 file in the office of the Secretary of State, at which, any
24 process, notice, or demand required or permitted by law may
25 be served upon the registered agent of the limited liability
26 company.
27 "Registered agent" means a person who is an agent for
28 service of process on the limited liability company who is
29 appointed by the limited liability company and whose address
30 is the registered office of the limited liability company.
31 "Restated articles of organization" means the articles of
32 organization restated as provided in Section 5-30.
33 "State" means a state, territory, or possession of the
34 United States, the District of Columbia, or the Commonwealth
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1 of Puerto Rico.
2 "Transfer" includes an assignment, conveyance, deed, bill
3 of sale, lease, mortgage, security interest, encumbrance, and
4 gift.
5 (Source: P.A. 87-1062.)
6 (805 ILCS 180/1-10)
7 Sec. 1-10. Limited liability company name.
8 (a) The name of each limited liability company as set
9 forth in its articles of organization:
10 (1) shall contain the terms words "limited
11 liability company", or "L.L.C.", or "LLC";
12 (2) may not contain a word or phrase, or an
13 abbreviation or derivation thereof, the use of which is
14 prohibited or restricted by any other statute of this
15 State unless the restriction has been complied with;
16 (3) shall consist of letters of the English
17 alphabet, Arabic or Roman numerals, or symbols capable of
18 being readily reproduced by the Office of the Secretary
19 of State;
20 (4) shall not contain any of the following terms:
21 "Corporation," "Corp.," "Incorporated," "Inc.," "Ltd.,"
22 "Co.," "Limited Partnership" or "L.P."; and
23 (5) shall be the name under which the limited
24 liability company transacts business in this State unless
25 the limited liability company also elects to adopt an
26 assumed name or names as provided in this Act; provided,
27 however, that the limited liability company may use any
28 divisional designation or trade name without complying
29 with the requirements of this Act, provided the limited
30 liability company also clearly discloses its name;.
31 (6) shall not contain any word or phrase that
32 indicates or implies that the limited liability company
33 is authorized or empowered to be in the business of a
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1 corporate fiduciary unless otherwise permitted by the
2 Commissioner of the Office of Banks and Real Estate under
3 Section 1-9 of the Corporate Fiduciary Act. The word
4 "trust", "trustee", or "fiduciary" may be used by a
5 limited liability company only if it has first complied
6 with Section 1-9 of the Corporate Fiduciary Act; and
7 (7) shall contain the word "trust", if it is a
8 limited liability company organized for the purpose of
9 accepting and executing trusts.
10 (b) Nothing in this Section or Section 1-20 shall
11 abrogate or limit the common law or statutory law of unfair
12 competition or unfair trade practices, nor derogate from the
13 common law or principles of equity or the statutes of this
14 State or of the United States of America with respect to the
15 right to acquire and protect copyrights, trade names,
16 trademarks, service marks, service names, or any other right
17 to the exclusive use of names or symbols.
18 (c) The name shall not contain any word or phrase that
19 indicates or implies that it is organized for any purposes
20 other than those permitted by this Act as limited by its
21 articles of organization.
22 (d) The name shall be distinguishable upon the records
23 in the Office of the Secretary of State from all of the
24 following:
25 (1) Any limited liability company that has articles
26 of organization filed with the Secretary of State under
27 Section 5-5.
28 (2) Any foreign limited liability company admitted
29 to transact business in this State.
30 (3) Any name for which an exclusive right has been
31 reserved in the Office of the Secretary of State under
32 Section 1-15.
33 (4) Any assumed name that is registered with the
34 Secretary of State under Section 1-20.
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1 (e) The provisions of subsection (d) of this Section
2 shall not apply if the organizer files with the Secretary of
3 State a certified copy of a final decree of a court of
4 competent jurisdiction establishing the prior right of the
5 applicant to the use of that name in this State.
6 (f) The Secretary of State shall determine whether a
7 name is "distinguishable" from another name for the purposes
8 of this Act. Without excluding other names that may not
9 constitute distinguishable names in this State, a name is not
10 considered distinguishable, for purposes of this Act, solely
11 because it contains one or more of the following:
12 (1) The word "limited", "liability" or "company" or
13 an abbreviation of one of those words.
14 (2) Articles, conjunctions, contractions,
15 abbreviations, or different tenses or number of the same
16 word.
17 (Source: P.A. 87-1062.)
18 (805 ILCS 180/1-25)
19 Sec. 1-25. Nature of business. A limited liability
20 company may be formed for carry on any lawful purpose or
21 business except:
22 (1) banking, exclusive of fiduciaries organized for
23 the purpose of accepting and executing trusts;
24 (2) insurance unless carried on as a business of a
25 syndicate or limited syndicate under Article V 1/2 of the
26 Illinois Insurance Code;
27 (3) the practice of dentistry unless all the
28 members and managers are licensed as dentists under the
29 Illinois Dental Practice Act; or
30 (4) the practice of medicine unless all the members
31 and managers are licensed to practice medicine under the
32 Medical Practice Act of 1987.
33 (Source: P.A. 88-573, eff. 8-11-94; 89-201, eff. 1-1-96.)
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1 (805 ILCS 180/1-30)
2 Sec. 1-30. Powers. Each limited liability company
3 organized and existing under this Act may do all of the
4 following:
5 (1) Sue and be sued, complain and defend, and
6 participate in administrative or other proceedings, in its
7 name.
8 (2) Have a seal, which may be altered at pleasure, and
9 use the same by causing it, or a facsimile thereof, to be
10 impressed or affixed or in any other manner reproduced,
11 provided that the affixing of a seal to an instrument shall
12 not give the instrument additional force or effect, or change
13 the construction thereof, and the use of a seal is not
14 mandatory.
15 (3) Purchase, take, receive, lease as lessee, take by
16 gift, legacy, or otherwise acquire, own, hold, use, and
17 otherwise deal in and with any real or personal property, or
18 any interest therein, wherever situated.
19 (4) Sell, convey, mortgage, pledge, lease as lessor, and
20 otherwise dispose of all or any part of its property and
21 assets.
22 (5) Lend money to and otherwise assist its members and
23 employees, except as otherwise provided in the operating
24 agreement or articles of organization.
25 (6) Purchase, take, receive, subscribe for or otherwise
26 acquire, own, hold, vote, use, employ, sell, mortgage, loan,
27 pledge, or otherwise dispose of, and otherwise use and deal
28 in and with, shares or other interests in or obligations of
29 other limited liability companies, domestic or foreign
30 corporations, associations, general or limited partnerships,
31 or individuals.
32 (7) Incur liabilities, borrow money for its proper
33 purposes at any rate of interest the limited liability
34 company may determine without regard to the restrictions of
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1 any usury law of this State, issue notes, bonds, and other
2 obligations, secure any of its obligations by mortgage or
3 pledge or deed of trust of all or any part of its property,
4 franchises, and income, and make contracts, including
5 contracts of guaranty and suretyship.
6 (8) Invest its surplus funds from time to time, lend
7 money for its proper purposes, and take and hold real and
8 personal property as security for the payment of funds so
9 loaned or invested.
10 (9) Conduct its business, carry on its operations, have
11 offices within and without this State, and exercise in any
12 other state, territory, district, or possession of the United
13 States or in any foreign country the powers granted by this
14 Act.
15 (10) Elect managers and appoint agents of the limited
16 liability company, define their duties, and fix their
17 compensation.
18 (11) Enter into or amend an Make and alter one or more
19 operating agreement agreements, not inconsistent with its
20 articles of organization or with the laws of this State, for
21 the administration and regulation of the affairs of the
22 limited liability company.
23 (12) Make donations for the public welfare or for
24 charitable, scientific, religious, or educational purposes,
25 lend money to the government, and transact any lawful
26 business in aid of the United States.
27 (13) Establish deferred compensation plans, pension
28 plans, profit-sharing plans, bonus plans, option plans, and
29 other incentive plans for its managers and employees and make
30 the payments provided for therein.
31 (14) Become a promoter, partner, member, associate, or
32 manager of any general partnership, limited partnership,
33 joint venture or similar association, any other limited
34 liability company, or other enterprise.
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1 (15) Have and exercise all powers necessary or
2 convenient to effect any or all of the purposes for which the
3 limited liability company is organized.
4 (Source: P.A. 87-1062.)
5 (805 ILCS 180/1-35)
6 Sec. 1-35. Registered office and registered agent.
7 (a) Each limited liability company and foreign limited
8 liability company shall continuously maintain in this State a
9 registered agent and registered office, which agent must be
10 an individual resident of this State, a domestic corporation,
11 or a foreign corporation having a place of business in, and
12 authorized to do business in, this State. If the agent is a
13 corporation, the corporation must be authorized by its
14 articles of incorporation to act as an agent.
15 (b) A limited liability company or foreign limited
16 liability company may change its registered agent or the
17 address of its registered office pursuant to Section 5-15 or
18 5-20.
19 (c) The registered agent may at any time resign by
20 filing in the Office of the Secretary of State written notice
21 thereof and by mailing a copy thereof to the limited
22 liability company or foreign limited liability company at its
23 principal office as it is known to the resigning registered
24 agent. The notice must be mailed at least 10 days before the
25 date of filing thereof with the Secretary of State. The
26 notice shall be executed by the registered agent, if an
27 individual, or by a principal officer, if the registered
28 agent is a corporation. The notice shall set forth all of
29 the following:
30 (1) The name of the limited liability company for
31 which the registered agent is acting.
32 (2) The name of the registered agent.
33 (3) The address, including street, number, city and
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1 county of the limited liability company's then registered
2 office in this State.
3 (4) That the registered agent resigns.
4 (5) The effective date of the resignation, which
5 shall not be sooner than 30 days after the date of
6 filing.
7 (6) The address of the principal office of the
8 limited liability company as it is known to the
9 registered agent.
10 (7) A statement that a copy of the notice has been
11 sent by registered or certified mail to the principal
12 office of the limited liability company within the time
13 and in the manner prescribed by this Section.
14 (Source: P.A. 87-1062.)
15 (805 ILCS 180/1-40)
16 Sec. 1-40. Records to be kept.
17 (a) Each limited liability company shall keep at the
18 registered office or the principal place of business of the
19 company named in the articles of organization or other
20 reasonable locations specified in the operating agreement all
21 of the following:
22 (1) A list of the full name and last known address
23 of each member setting forth the amount of cash each
24 member has contributed, a description and statement of
25 the agreed value of the other property or services each
26 member has contributed or has agreed to contribute in the
27 future, and the date on which each became a member.
28 (2) A copy of the articles of organization, as
29 amended or restated, together with executed copies of any
30 powers of attorney under which any articles, application,
31 or certificate has been executed.
32 (3) Copies of the limited liability company's
33 federal, State, and local income tax returns and reports,
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1 if any, for the 3 most recent years.
2 (4) Copies of any then effective written operating
3 agreement and any amendments thereto and of any financial
4 statements of the limited liability company for the 3
5 most recent years.
6 (5) Unless contained in the articles of
7 organization or an operating agreement, a writing
8 prepared by a manager or managers as specifically
9 authorized by the members or, if there are no managers,
10 all of the members or the member or members that may be
11 designated by the members pursuant to limited liability
12 company action properly taken under Section 10-5, setting
13 out all of the following:
14 (A) The times at which or events on the
15 happening of which any additional contributions
16 agreed to be made by each member are to be made.
17 (B) Any right of a member to receive
18 distributions that include a return of all or any
19 part of the member's contribution.
20 (C) Any power of a member to grant the right
21 to become a member to an assignee of any part of the
22 member's limited liability company interest, and the
23 terms and conditions of the power.
24 (b) Records kept under this Section may be inspected and
25 copied at the request and expense of any member or legal
26 representative of a deceased member or member under legal
27 disability during ordinary business hours.
28 (Source: P.A. 87-1062.)
29 (805 ILCS 180/1-43 new)
30 Sec. 1-43. Supplemental principles of law. Unless
31 displaced by particular provisions of this Act, the
32 principles of law and equity supplement this Act.
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1 (805 ILCS 180/5-1)
2 Sec. 5-1. Organization.
3 (a) One or more persons, other than natural persons
4 under 18 years of age, may organize a limited liability
5 company by executing and delivering articles of organization
6 to the Secretary of State as specified in Sections 5-5 and
7 5-45. The organizers need not be members of the limited
8 liability company. Each organizer of a limited liability
9 company organized to engage in the practice of medicine shall
10 be a licensed physician of this State. The execution of the
11 articles of organization constitutes an affirmation by the
12 person, under penalty of perjury, that the facts stated
13 therein are true.
14 (b) A limited liability company shall have one 2 or more
15 members.
16 (c) A limited liability company is a legal entity
17 distinct from its members.
18 (Source: P.A. 89-201, eff. 1-1-96.)
19 (805 ILCS 180/5-5)
20 Sec. 5-5. Articles of organization.
21 (a) The articles of organization shall set forth all of
22 the following:
23 (1) The name of the limited liability company and
24 the address of its principal place of business which may,
25 but need not be a place of business in this State.
26 (2) The purposes for which the limited liability
27 company is organized, which may be stated to be, or to
28 include, the transaction of any or all lawful businesses
29 for which limited liability companies may be organized
30 under this Act.
31 (3) The name of its registered agent and the
32 address of its registered office.
33 (4) If the limited liability company is to be
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1 managed by a manager or managers, the names and business
2 addresses of the initial manager or managers.
3 (5) If management of the limited liability company
4 is to be vested in retained, in whole or in part, by the
5 members under Section 15-1, then the names and addresses
6 of the initial member or members.
7 (6) The latest date, if any, upon which the limited
8 liability company is to dissolve and other events of
9 dissolution, if any, that may be agreed upon by the
10 members under Section 35-1 hereof.
11 (7) The name and address of each organizer.
12 (8) Any other provision, not inconsistent with law,
13 that the members elect to set out in the articles of
14 organization for the regulation of the internal affairs
15 of the limited liability company, including any
16 provisions that, under this Act, are required or
17 permitted to be set out in the operating agreement of the
18 limited liability company.
19 (b) A limited liability company is organized at the time
20 articles of organization are filed by the Secretary of State
21 or at any later time, not more than 60 days after the filing
22 of the articles of organization, specified in the articles of
23 organization.
24 (c) Articles of organization for the organization of a
25 limited liability company for the purpose of accepting and
26 executing trusts shall not be filed by the Secretary of State
27 until there is delivered to him or her a statement executed
28 by the Commissioner of the Office of Banks and Real Estate
29 that the organizers of the limited liability company have
30 made arrangements with the Commissioner of the Office of
31 Banks and Real Estate to comply with the Corporate Fiduciary
32 Act.
33 (Source: P.A. 87-1062.)
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1 (805 ILCS 180/5-15)
2 Sec. 5-15. Amendment by managers. A majority of the
3 managers of a limited liability company may adopt one or more
4 amendments to its articles of organization without member
5 action to do any of the following:
6 (1) To remove the name and address of any manager named
7 in the articles of organization who is no longer a manager.
8 (2) To remove the name and address of the initial
9 registered agent or the address of the initial registered
10 office, if a statement of change is on file with the
11 Secretary of State.
12 (3) To change the company name by substituting the words
13 "limited liability company" for the abbreviation "L.L.C." or
14 "LLC" or vice versa, or by adding a geographical attribution
15 to the name.
16 (4) To restate its articles of organization as currently
17 amended; such articles supersede the original articles and
18 all amendments thereto.
19 (Source: P.A. 87-1062.)
20 (805 ILCS 180/5-25)
21 Sec. 5-25. Articles of amendment. The articles of
22 amendment shall be executed and filed in duplicate and shall
23 set forth the following:
24 (1) The name of the limited liability company.
25 (2) The text of each amendment adopted.
26 (3) When the amendment was adopted by the managers:
27 (A) a statement that the amendment was approved by
28 not less than the minimum number of managers necessary to
29 approve the amendment adopted by a majority of the
30 managers; and
31 (B) a statement that member action was not
32 required.
33 (4) When the amendment was adopted by the members,: a
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1 statement that the amendment was approved by not less than
2 the minimum number of members necessary to approve the
3 amendment.
4 (A) a statement that the amendment was adopted at a
5 meeting of members by the affirmative vote of not less
6 than the minimum number of votes necessary to adopt the
7 amendment, as provided by the articles of organization;
8 or
9 (B) a statement that the amendment was adopted by
10 written consent signed by the members having not less
11 than the minimum number of votes necessary to adopt the
12 amendment, as provided by the articles of organization.
13 (5) The date on which the amendment is to become
14 effective, if the amendment is to become effective after the
15 date on which the articles of amendment are filed.
16 (Source: P.A. 87-1062.)
17 (805 ILCS 180/5-45)
18 Sec. 5-45. Forms, execution, acknowledgement and filing.
19 (a) All reports required by this Act to be filed in the
20 Office of the Secretary of State shall be made on forms
21 prescribed and furnished by the Secretary of State. Forms
22 for all other documents to be filed in the Office of the
23 Secretary of State shall be furnished by the Secretary of
24 State upon request therefor, but the use thereof, unless
25 otherwise specifically prescribed in this Act, shall not be
26 mandatory.
27 (b) Whenever any provision of this Act specifically
28 requires any document to be executed by the limited liability
29 company in accordance with this Section, unless otherwise
30 specifically stated in this Act and subject to any additional
31 provisions of this Act, the document shall be executed, in
32 ink, as follows:
33 (1) The articles of organization shall be signed by
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1 the organizer or organizers.
2 (2) All other documents shall be signed:
3 (A) by a manager and verified by him or her;
4 or
5 (B) if there are no managers, then by the
6 members or those of them that may be designated by a
7 majority vote of the members.
8 (c) The name of a person signing the document and the
9 capacity in which the person signs shall be stated beneath or
10 opposite the person's signature.
11 (d) The execution of any document required by this Act
12 by a member or manager constitutes an affirmation under the
13 penalties of perjury that the facts stated therein are true
14 and that the person has authority to execute the document.
15 (e) When filed in the Office of the Secretary of State,
16 an authorization, including a power of attorney, to sign a
17 record must be in writing, then sworn to, verified, or
18 acknowledged.
19 (Source: P.A. 87-1062.)
20 (805 ILCS 180/5-50)
21 Sec. 5-50. Amendment or dissolution by judicial act. If
22 a person required by Section 5-45 to execute an amendment or
23 articles of dissolution fails or refuses to do so, any other
24 member and any transferee assignee of a limited liability
25 company interest, who is adversely affected by the failure or
26 refusal, may petition a court to direct the amendment or
27 dissolution. If the court finds that the amendment or
28 dissolution is proper and that any person so designated has
29 failed or refused to execute the amendment or articles of
30 dissolution, it shall order the Secretary of State to record
31 an appropriate amendment or dissolution.
32 (Source: P.A. 87-1062.)
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1 (805 ILCS 180/10-1)
2 Sec. 10-1. Admission of members. After the filing of
3 the articles of organization, a person who acquires a
4 membership interest directly from the limited liability
5 company or is a transferee an assignee of a membership
6 interest may be admitted as a member as provided in the
7 operating agreement or in the articles of organization or, if
8 the operating agreement or articles of organization do not
9 provide for the admission of those persons, then with
10 unanimous consent of the members.
11 (Source: P.A. 87-1062.)
12 (805 ILCS 180/10-10)
13 Sec. 10-10. Liability of members and managers.
14 (a) Except as otherwise provided in subsection (d) of
15 this Section, the debts, obligations, and liabilities A
16 member of a limited liability company, whether arising in
17 contract, tort, or otherwise, are solely the debts,
18 obligations, and liabilities of the company. A member or
19 manager is not shall be personally liable for a any act,
20 debt, obligation, or liability of the company solely by
21 reason of being or acting as a member or manager limited
22 liability company or another member or manager to the extent
23 that a shareholder of an Illinois business corporation is
24 liable in analogous circumstances under Illinois law.
25 (b) (Blank). A manager of a limited liability company
26 shall be personally liable for any act, debt, obligation, or
27 liability of the limited liability company or another manager
28 or member to the extent that a director of an Illinois
29 business corporation is liable in analogous circumstances
30 under Illinois law.
31 (c) The failure of a limited liability company to
32 observe the usual company formalities or requirements
33 relating to the exercise of its company powers or management
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1 of its business is not a ground for imposing personal
2 liability on the members or managers for liabilities of the
3 company.
4 (d) All or specified members of a limited liability
5 company are liable in their capacity as members for all or
6 specified debts, obligations, or liabilities of the company
7 if:
8 (1) a provision to that effect is contained in the
9 articles of organization; and
10 (2) a member so liable has consented in writing to
11 the adoption of the provision or to be bound by the
12 provision.
13 (Source: P.A. 87-1062.)
14 (805 ILCS 180/10-15)
15 Sec. 10-15. Member's right to information Information and
16 accounting.
17 (a) A limited liability company shall provide members
18 and their agents and attorneys access to its records,
19 including the records required to be kept under Section 1-40,
20 at the company's principal place of business or other
21 reasonable locations specified in the operating agreement.
22 The company shall provide former members and their agents and
23 attorneys access for proper purposes to records pertaining to
24 the period during which they were members. The right of
25 access provides the opportunity to inspect and copy records
26 during ordinary business hours. The company may impose a
27 reasonable charge, limited to the costs of labor and
28 material, for copies of records furnished.
29 (b) A member has the right upon written demand given to
30 the limited liability company to obtain at the company's
31 expense a copy of any written operating agreement. A member
32 of a limited liability company shall have the right to do all
33 of the following:
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1 (1) To inspect and copy limited liability company
2 records required by Section 1-40 to be kept.
3 (2) To obtain from the manager or managers from time to
4 time, subject to reasonable standards which may be set forth
5 in the articles of organization, the operating agreement, or
6 otherwise established by the manager or managers, upon
7 reasonable demand for any purpose reasonably related to the
8 member's interest as a member:
9 (A) true and full information regarding the state
10 of the business and financial condition of the limited
11 liability company and any other information regarding the
12 affairs of the limited liability company; and
13 (B) promptly after becoming available, a copy of
14 the limited liability company's federal, State, and local
15 income tax returns for each year.
16 (3) To have a formal accounting of limited liability
17 company affairs whenever circumstances render it just and
18 reasonable.
19 (Source: P.A. 87-1062.)
20 (805 ILCS 180/Art. 13 heading new)
21 Article 13. Relations of members and managers to
22 persons dealing with limited liability company
23 (805 ILCS 180/13-5 new)
24 Sec. 13-5. Agency of members and managers.
25 (a) Subject to subsections (b) and (c):
26 (1) Each member is an agent of the limited
27 liability company for the purpose of its business, and an
28 act of a member, including the signing of an instrument
29 in the company's name, for apparently carrying on, in the
30 ordinary course, the company's business or business of
31 the kind carried on by the company binds the company,
32 unless the member had no authority to act for the company
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1 in the particular matter and the person with whom the
2 member was dealing knew or had notice that the member
3 lacked authority.
4 (2) An act of a member that is not apparently for
5 carrying on, in the ordinary course, the company's
6 business or business of the kind carried on by the
7 company binds the company only if the act was authorized
8 by the other members.
9 (b) Subject to subsection (c), in a manager-managed
10 company:
11 (1) A member is not an agent of the company for the
12 purpose of its business solely by reason of being a
13 member. Each manager is an agent of the company for the
14 purpose of its business, and an act of a manager,
15 including the signing of an instrument in the company's
16 name, for apparently carrying on, in the ordinary course,
17 the company's business or business of the kind carried on
18 by the company binds the company, unless the manager had
19 no authority to act for the company in the particular
20 matter and the person with whom the manager was dealing
21 knew or had notice that the manager lacked authority.
22 (2) An act of a manager which is not apparently for
23 carrying on, in the ordinary course, the company's
24 business or business of the kind carried on by the
25 company binds the company only if the act was authorized
26 under Section 15-1.
27 (c) Unless the articles of organization limit their
28 authority, any member of a member-managed company or manager
29 of a manager-managed company may sign and deliver any
30 instrument transferring or affecting the company's interest
31 in real property. The instrument is conclusive in favor of a
32 person who gives value without knowledge of the lack of the
33 authority of the person signing and delivering the
34 instrument.
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1 (805 ILCS 180/13-10 new)
2 Sec. 13-10. Limited liability company liable for member
3 or manager's actionable conduct. A limited liability company
4 is liable for loss or injury caused to a person, or for a
5 penalty incurred, as a result of a wrongful act or omission,
6 or other actionable conduct, of a member or manager acting in
7 the ordinary course of business of the company or with
8 authority of the company.
9 (805 ILCS 180/15-1)
10 Sec. 15-1. Management of limited liability company.
11 (a) In a member-managed company:
12 (1) each member has equal rights in the management
13 and conduct of the company's business; and
14 (2) except as otherwise provided in subsection (c)
15 of this Section, any matter relating to the business of
16 the company may be decided by a majority of the members.
17 (b) In a manager-managed company:
18 (1) each manager has equal rights in the management
19 and conduct of the company's business;
20 (2) except as otherwise provided in subsection (c)
21 of this Section, any matter relating to the business of
22 the company may be exclusively decided by the manager or,
23 if there is more than one manager, by a majority of the
24 managers; and
25 (3) a manager:
26 (A) must be designated, appointed, elected,
27 removed, or replaced by a vote, approval, or consent
28 of a majority of the members; and
29 (B) holds office until a successor has been
30 elected and qualified, unless the manager sooner
31 resigns or is removed.
32 (c) The only matters of a member or manager-managed
33 company's business requiring the consent of all of the
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1 members are the following:
2 (1) the amendment of the operating agreement under
3 Section 15-5;
4 (2) an amendment to the articles of organization
5 under Article 5;
6 (3) the compromise of an obligation to make a
7 contribution under Section 20-5;
8 (4) the compromise, as among members, of an
9 obligation of a member to make a contribution or return
10 money or other property paid or distributed in violation
11 of this Act;
12 (5) the making of interim distributions under
13 subsection (a) of Section 25-1, including the redemption
14 of an interest;
15 (6) the admission of a new member;
16 (7) the use of the company's property to redeem an
17 interest subject to a charging order;
18 (8) the consent to dissolve the company under
19 subdivision (2) of subsection (a) of Section 35-1;
20 (9) a waiver of the right to have the company's
21 business wound up and the company terminated under
22 Section 35-3;
23 (10) the consent of members to merge with another
24 entity under Section 37-20; and
25 (11) the sale, lease, exchange, or other disposal
26 of all, or substantially all, of the company's property
27 with or without goodwill.
28 (d) Action requiring the consent of members or managers
29 under this Act may be taken without a meeting.
30 (e) A member or manager may appoint a proxy to vote or
31 otherwise act for the member or manager by signing an
32 appointment instrument, either personally or by the member or
33 manager's attorney-in-fact. Management of the limited
34 liability company shall be vested in its members; however, if
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1 the articles of organization so provide, the management of
2 the limited liability company may be vested, in whole or in
3 part, in a manager or managers who shall be elected by the
4 members in the manner prescribed by the operating agreement
5 or articles of organization of the limited liability company.
6 A manager or managers shall have the authority and
7 responsibility accorded to them by the operating agreement or
8 articles of organization, and the members shall not have the
9 authority and responsibility accorded to the managers, unless
10 specifically retained by them in the operating agreement or
11 the articles of organization. If the articles of
12 organization do not provide for the management of the limited
13 liability company by a manager or managers, instruments and
14 documents shall be valid and binding upon the limited
15 liability company if executed by any one or more of the
16 members unless otherwise provided in the articles of
17 organization.
18 (Source: P.A. 87-1062.)
19 (805 ILCS 180/15-3 new)
20 Sec. 15-3. General standards of member and manager's
21 conduct.
22 (a) The fiduciary duties a member owes to a
23 member-managed company and its other members include the duty
24 of loyalty and the duty of care referred to in subsections
25 (b) and (c) of this Section.
26 (b) A member's duty of loyalty to a member-managed
27 company and its other members includes the following:
28 (1) to account to the company and to hold as
29 trustee for it any property, profit, or benefit derived
30 by the member in the conduct or winding up of the
31 company's business or derived from a use by the member of
32 the company's property, including the appropriation of a
33 company's opportunity;
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1 (2) to act fairly when a member deals with the
2 company in the conduct or winding up of the company's
3 business as or on behalf of a party having an interest
4 adverse to the company; and
5 (3) to refrain from competing with the company in
6 the conduct of the company's business before the
7 dissolution of the company.
8 (c) A member's duty of care to a member-managed company
9 and its other members in the conduct of a winding up of the
10 company's business is limited to refraining from engaging in
11 grossly negligent or reckless conduct, intentional
12 misconduct, or a knowing violation of law.
13 (d) A member shall discharge his or her duties to a
14 member-managed company and its other members under this Act
15 or under the operating agreement and exercise any rights
16 consistent with the obligation of good faith and fair
17 dealing.
18 (e) A member of a member-managed company does not
19 violate a duty or obligation under this Act or under the
20 operating agreement merely because the member's conduct
21 furthers the member's own interest.
22 (f) This Section applies to a person winding up the
23 limited liability company's business as the personal or legal
24 representative of the last surviving member as if the person
25 were a member.
26 (g) In a manager-managed company:
27 (1) a member who is not also a manager owes no
28 duties to the company or to the other members solely by
29 reason of being a member;
30 (2) a manager is held to the same standards of
31 conduct prescribed for members in subsections (b), (c),
32 (d), and (e) of this Section;
33 (3) a member who pursuant to the operating
34 agreement exercises some or all of the authority of a
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1 manager in the management and conduct of the company's
2 business is held to the standards of conduct in
3 subsections (b), (c), (d), and (e) of this Section to the
4 extent that the member exercises the managerial authority
5 vested in a manager by this Act; and
6 (4) a manager is relieved of liability imposed by
7 law for violations of the standards prescribed by
8 subsections (b), (c), (d), and (e) to the extent of the
9 managerial authority delegated to the members by the
10 operating agreement.
11 (805 ILCS 180/15-5)
12 Sec. 15-5. Operating agreement.
13 (a) Except as otherwise provided in subsection (b) of
14 this Section, all members of a limited liability company may
15 enter into an operating agreement to regulate the affairs of
16 the company and the conduct of its business and to govern
17 relations among the members, managers, and company. To the
18 extent the operating agreement does not otherwise provide,
19 this Act governs relations among the members, managers, and
20 company.
21 (b) The operating agreement may not:
22 (1) unreasonably restrict a right to information or
23 access to records under Section 10-15;
24 (2) vary the right to expel a member in an event
25 specified in subdivision (6) of Section 35-45;
26 (3) vary the requirement to wind up the limited
27 liability company's business in a case specified in
28 subdivisions (3) or (4) of Section 35-1;
29 (4) restrict rights of a person, other than a
30 manager, member, and transferee of a member's
31 distributional interest, under this Act;
32 (5) restrict the power of a member to dissociate
33 under Section 35-50, although an operating agreement may
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1 determine whether a dissociation is wrongful under
2 Section 35-50, and it may eliminate or vary the
3 obligation of the limited liability company to purchase
4 the dissociated member's distributional interest under
5 Section 35-60;
6 (6) eliminate or reduce a member's fiduciary
7 duties, but may;
8 (A) identify specific types or categories of
9 activities that do not violate these duties, if not
10 manifestly unreasonable; and
11 (B) specify the number or percentage of
12 members or disinterested managers that may authorize
13 or ratify, after full disclosure of all materials
14 facts, a specific act or transaction that otherwise
15 would violate these duties; or
16 (7) eliminate or reduce the obligation of good
17 faith and fair dealing under subsection (d) of Section
18 15-3, but the operating agreement may determine the
19 standards by which the performance of the obligation is
20 to be measured, if the standards are not manifestly
21 unreasonable.
22 (c) In a limited liability company with only one member,
23 the operating agreement includes any of the following:
24 (1) Any writing, without regard to whether the
25 writing otherwise constitutes an agreement, as to the
26 company's affairs signed by the sole member.
27 (2) Any written agreement between the member and
28 the company as to the company's affairs.
29 (3) Any agreement, which need not be in writing,
30 between the member and the company as to a company's
31 affairs, provided that the company is managed by a
32 manager who is a person other than the member. The power
33 to adopt, alter, amend, or repeal the operating agreement
34 of a limited liability company shall be vested in the
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1 members of the company unless vested in the manager or
2 managers of the company by the articles of organization.
3 A new operating agreement may be adopted by the members
4 unless prohibited by the articles of organization. The
5 operating agreement may contain any provisions for the
6 regulation and management of the affairs of the limited
7 liability company not inconsistent with law or the
8 articles of organization.
9 (Source: P.A. 87-1062.)
10 (805 ILCS 180/15-7 new)
11 Sec. 15-7. Member and manager's right to payments and
12 reimbursement.
13 (a) A limited liability company shall reimburse a member
14 or manager for payments made and indemnify a member or
15 manager for liabilities incurred by the member or manager in
16 the ordinary course of the business of the company or for the
17 preservation of its business or property.
18 (b) A limited liability company shall reimburse a member
19 for an advance to the company beyond the amount of
20 contribution the member agreed to make.
21 (c) A payment or advance made by a member that gives
22 rise to an obligation of a limited liability company under
23 subsection (a) or (b) of this Section constitutes a loan to
24 the company upon which interest accrues from the date of the
25 payment or advance.
26 (d) A member is not entitled to remuneration for
27 services performed for a limited liability company, except
28 for reasonable compensation for services rendered in winding
29 up the business of the company.
30 (805 ILCS 180/15-20 new)
31 Sec. 15-20. Actions by members.
32 (a) A member may maintain an action against a limited
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1 liability company or another member for legal or equitable
2 relief, with or without an accounting as to the company's
3 business, to enforce all of the following:
4 (1) The member's rights under the operating
5 agreement.
6 (2) The member's rights under this Act.
7 (3) The rights and otherwise protect the interests
8 of the member, including rights and interests arising
9 independently of the member's relationship to the
10 company.
11 (b) The accrual, and any time limited for the assertion,
12 of a right of action for a remedy under this Section is
13 governed by other law. A right to an accounting upon a
14 dissolution and winding up does not revive a claim barred by
15 law.
16 (805 ILCS 180/20-5)
17 Sec. 20-5. Member's liability for contributions.
18 (a) (Blank). A promise by a member to contribute to the
19 limited liability company is not enforceable unless set out
20 in a writing signed by the member.
21 (b) (Blank). Except as provided in the operating
22 agreement or in the articles of organization, a member is
23 obligated to the limited liability company to perform any
24 enforceable promise to contribute cash or property or to
25 perform services, even if the member is unable to perform
26 because of death, disability, or any other reason. If a
27 member does not make the member's required contribution of
28 property or services, the member is obligated, at the option
29 of the limited liability company, to contribute cash equal to
30 that portion of the value, as stated in the limited liability
31 company records required to be kept by Section 1-40, of the
32 contribution that has not been made.
33 (c) A member's obligation to contribute money, property,
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1 or other benefit to, or to perform services for, a limited
2 liability company is not excused by the member's death,
3 disability, or other inability to perform personally. If a
4 member does not make the required contribution of property or
5 services, the member is obligated at the option of the
6 company to contribute money equal to the value of that
7 portion of the stated contribution which has not been made.
8 (d) A creditor of a limited liability company who
9 extends credit or otherwise acts in reliance on an obligation
10 described in subsection (c), and without notice of any
11 compromise under subdivision (4) of subsection (c) of Section
12 15-1, may enforce the original obligation.
13 (Source: P.A. 87-1062.)
14 (805 ILCS 180/Art. 25 heading)
15 ARTICLE 25. Distributions and Resignation
16 (805 ILCS 180/25-1)
17 Sec. 25-1. Interim distributions.
18 (a) Any distributions made by a limited liability
19 company before its dissolution and winding up must be in
20 equal shares.
21 (b) A member has no right to receive, and may not be
22 required to accept, a distribution in kind. Except as
23 provided in this Article or Article 35, a member is entitled
24 to receive distributions from a limited liability company at
25 the times or upon the happening of the events specified in
26 the articles of organization or operating agreement or as the
27 manager or managers shall specify or, if there are no
28 managers, as the members shall specify pursuant to action
29 properly taken pursuant to Section 10-5.
30 (Source: P.A. 87-1062.)
31 (805 ILCS 180/25-30 new)
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1 Sec. 25-30. Limitations on distributions.
2 (a) A distribution may not be made if:
3 (1) the limited liability company would not be able
4 to pay its debts as they become due in the ordinary
5 course of business; or
6 (2) the company's total assets would be less than
7 the sum of its total liabilities plus the amount that
8 would be needed, if the company were to be dissolved,
9 wound up, and terminated at the time of the distribution,
10 to satisfy the preferential rights upon dissolution,
11 winding up, and termination of members whose preferential
12 rights are superior to those receiving the distribution.
13 (b) A limited liability company may base a determination
14 that a distribution is not prohibited under subsection (a) of
15 this Section on financial statements prepared on the basis of
16 accounting practices and principles that are reasonable in
17 the circumstances or on a fair valuation or other method that
18 is reasonable in the circumstances.
19 (c) Except as otherwise provided in subsection (e) of
20 this Section, the effect of a distribution under subsection
21 (a) of this Section is measured:
22 (1) in the case of distribution by purchase,
23 redemption, or other acquisition of a distributional
24 interest in a limited liability company, as of the date
25 money or other property is transferred or debt incurred
26 by the company; and
27 (2) in all other cases, as of the date the:
28 (A) distribution is authorized if the payment
29 occurs within 120 days after the date of
30 authorization; or
31 (B) payment is made if it occurs more than 120
32 days after the date of authorization.
33 (d) A limited liability company's indebtedness to a
34 member incurred by reason of a distribution made in
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1 accordance with this Section is at parity with the company's
2 indebtedness to its general, unsecured creditors.
3 (e) Indebtedness of a limited liability company,
4 including indebtedness issued in connection with or as part
5 of a distribution, is not considered a liability for purposes
6 of determinations under subsection (a) of this Section if its
7 terms provide that payment of principal and interest are made
8 only if and to the extent that payment of a distribution to
9 members could then be made under this Section. If the
10 indebtedness is issued as a distribution, each payment of
11 principal or interest on the indebtedness is treated as a
12 distribution, the effect of which is measured on the date the
13 payment is made.
14 (805 ILCS 180/25-35 new)
15 Sec. 25-35. Liability for unlawful distributions.
16 (a) A member of a member-managed company or a member or
17 manager of a manager-managed company who votes for or assents
18 to a distribution made in violation of Section 25-30, the
19 articles of organization, or the operating agreement is
20 personally liable to the company for the amount of the
21 distribution that exceeds the amount that could have been
22 distributed without violating Section 25-30, the articles of
23 organization, or the operating agreement if it is established
24 that the member or manager did not perform the member or
25 manager's duties in compliance with Section 15-3.
26 (b) A member of a manager-managed company who knew a
27 distribution was made in violation of Section 25-30, the
28 articles of organization, or the operating agreement is
29 personally liable to the company, but only to the extent that
30 the distribution received by the member exceeded the amount
31 that could have been properly paid under Section 25-30.
32 (c) A member or manager against whom an action is
33 brought under this Section may implead in the action:
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1 (1) all other members or managers who voted for or
2 assented to the distribution in violation of subsection
3 (a) of this Section and may compel contribution from
4 them; and
5 (2) all members who received a distribution in
6 violation of subsection (b) of this Section and may
7 compel contribution from the member in the amount
8 received in violation of subsection (b) of this Section.
9 (d) A proceeding under this Section is barred unless it
10 is commenced within 2 years after the distribution.
11 (805 ILCS 180/25-45 new)
12 Sec. 25-45. Known claims against dissolved limited
13 liability company.
14 (a) A dissolved limited liability company may dispose of
15 the known claims against it by following the procedure
16 described in this Section.
17 (b) A dissolved limited liability company shall notify
18 its known claimants in writing of the dissolution. The
19 notice must:
20 (1) specify the information required to be included
21 in a claim;
22 (2) provide a mailing address where the claim is to
23 be sent;
24 (3) state the deadline for receipt of the claim,
25 which may not be less than 120 days after the date the
26 written notice is received by the claimant; and
27 (4) state that the claim will be barred if not
28 received by the deadline.
29 (c) A claim against a dissolved limited liability
30 company is barred if the requirements of subsection (b) of
31 this Section are met, and:
32 (1) the claim is not received by the specified
33 deadline; or
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1 (2) in the case of a claim that is timely received
2 but rejected by the dissolved company, the claimant does
3 not commence a proceeding to enforce the claim within 90
4 days after the receipt of the notice of the rejection.
5 (d) For purposes of this Section, the term "claim" does
6 not include a contingent liability or a claim based on an
7 event occurring after the effective date of dissolution.
8 (805 ILCS 180/25-50 new)
9 Sec. 25-50. Other claims against dissolved limited
10 liability company.
11 (a) A dissolved limited liability company may publish
12 notice of its dissolution and request persons having claims
13 against the company to present them in accordance with the
14 notice.
15 (b) The notice must:
16 (1) be published at least once in a newspaper of
17 general circulation in the county in which the dissolved
18 limited liability company's principal office is located
19 or, if none in this State, in which its designated office
20 is or was last located;
21 (2) describe the information required to be
22 contained in a claim and provide a mailing address where
23 the claim is to be sent; and
24 (3) state that a claim against the limited
25 liability company is barred unless a proceeding to
26 enforce the claim is commenced within 5 years after
27 publication of the notice.
28 (c) If a dissolved limited liability company publishes a
29 notice in accordance with subsection (b) of this Section, the
30 claim of each of the following claimants is barred unless the
31 claimant commences a proceeding to enforce the claim against
32 the dissolved company within 5 years after the publication
33 date of the notice:
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1 (1) a claimant who did not receive written notice
2 under Section 25-45;
3 (2) a claimant whose claim was timely sent to the
4 dissolved company but not acted on; and
5 (3) a claimant whose claim is contingent or based
6 on an event occurring after the effective date of
7 dissolution.
8 (d) A claim not barred under this Section may be
9 enforced:
10 (1) against the dissolved limited liability
11 company, to the extent of its undistributed assets; or
12 (2) if the assets have been distributed in
13 liquidation, against a member of the dissolved company to
14 the extent of the member's proportionate share of the
15 claim or the company's assets distributed to the member
16 in liquidation, whichever is less, but a member's total
17 liability for all claims under this Section may not
18 exceed the total amount of assets distributed to the
19 member.
20 (805 ILCS 180/30-1)
21 Sec. 30-1. Member's distributional Nature of membership
22 interest.
23 (a) A member is not a co-owner of, and has no
24 transferable interest in, property of a limited liability
25 company.
26 (b) A distributional interest in a limited liability
27 company is personal property and, subject to Sections 30-5
28 and 30-10, may be transferred in whole or in part.
29 (c) An operating agreement may provide that a
30 distributional interest may be evidenced by a certificate of
31 the interest issued by the limited liability company and,
32 subject to Section 30-10, may also provide for the transfer
33 of any interest represented by the certificate. The interest
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1 of each member in a limited liability company is personal
2 property.
3 (Source: P.A. 87-1062.)
4 (805 ILCS 180/30-5)
5 Sec. 30-5. Transfer of a distributional Assignment of
6 membership interest. A transfer of a distributional interest
7 does not entitle the transferee to become or to exercise any
8 rights of a member. A transfer entitles the transferee to
9 receive, to the extent transferred, only the distributions to
10 which the transferor would be entitled. Unless provided
11 otherwise in the articles of organization or the operating
12 agreement, if the members of the limited liability company,
13 other than the member proposing to dispose of the interest,
14 do not approve of the proposed transfer or assignment by
15 unanimous consent, the transferee or assignee of the interest
16 shall have no right to participate in the management of the
17 business and affairs of the limited liability company or to
18 become a member.
19 (Source: P.A. 87-1062.)
20 (805 ILCS 180/30-10)
21 Sec. 30-10. Rights of a transferee assignee.
22 (a) A transferee of a distributional interest may become
23 a member of a limited liability company if and to the extent
24 that the transferor gives the transferee the right in
25 accordance with authority described in the operating
26 agreement or all other members consent.
27 (b) A transferee who has become a member, to the extent
28 transferred, has the rights and powers, and is subject to the
29 restrictions and liabilities, of a member under the operating
30 agreement of a limited liability company and this Act. A
31 transferee who becomes a member also is liable for the
32 transferor member's obligations to make contributions under
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1 Section 20-5 and for obligations under Section 25-35 to
2 return unlawful distributions, but the transferee is not
3 obligated for the transferor member's liabilities unknown to
4 the transferee at the time the transferee becomes a member.
5 (c) Whether or not a transferee of a distributional
6 interest becomes a member under subsection (a) of this
7 Section, the transferor is not released from liability to the
8 limited liability company under the operating agreement or
9 this Act.
10 (d) A transferee who does not become a member is not
11 entitled to participate in the management or conduct of the
12 limited liability company's business, require access to
13 information concerning the company's transactions, or inspect
14 or copy any of the company's records.
15 (e) A transferee who does not become a member is
16 entitled to:
17 (1) receive, in accordance with the transfer,
18 distributions to which the transferor would otherwise be
19 entitled;
20 (2) receive, upon dissolution and winding up of the
21 limited liability company's business:
22 (A) in accordance with the transfer, the net
23 amount otherwise distributable to the transferor;
24 and
25 (B) a statement of account only from the date
26 of the latest statement of account agreed to by all
27 the members; and
28 (3) seek under subdivision (6) of Section 35-1 a
29 judicial determination that it is equitable to dissolve
30 and wind up the company's business.
31 (f) A limited liability company need not give effect to
32 a transfer until it has notice of the transfer. A transferee
33 or assignee of a membership interest who does not become a
34 substituted member shall be entitled to receive only the
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1 share of profits or other compensation by way of income and
2 the return of contributions to which that member otherwise
3 would be entitled.
4 (Source: P.A. 87-1062.)
5 (805 ILCS 180/30-20)
6 Sec. 30-20. Rights of creditor of a member.
7 (a) On application by a judgment creditor of a member of
8 a limited liability company or of a member's transferee, a
9 court having jurisdiction may charge the distributional
10 interest of the judgment debtor to satisfy the judgment. The
11 court may appoint a receiver of the share of the
12 distributions due or to become due to the judgment debtor and
13 make all other orders, directions, accounts, and inquiries
14 the judgment debtor might have made or which the
15 circumstances may require to give effect to the charging
16 order.
17 (b) A charging order constitutes a lien on the judgment
18 debtor's distributional interest. The court may order a
19 foreclosure of a lien on a distributional interest subject to
20 the charging order at any time. A purchaser at the
21 foreclosure sale has the rights of a transferee.
22 (c) at any time before foreclosure, a distributional
23 interest in a limited liability company that is charged may
24 be redeemed:
25 (1) by the judgment debtor;
26 (2) with property other than the company's
27 property, by one or more of the other members; or
28 (3) with the company's property, but only if
29 permitted by the operating agreement.
30 (d) This Act does not affect a member's right under
31 exemption laws with respect to the member's distributional
32 interest in a limited liability company.
33 (e) This Section provides the exclusive remedy by which
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1 a judgment creditor of a member or a transferee may satisfy a
2 judgment out of the judgment debtor's distributional interest
3 in a limited liability company. On application to a court of
4 competent jurisdiction by any judgment creditor of a member,
5 the court may charge the member's share of profits and right
6 to distributions with payment of the unsatisfied amount of
7 the judgment with interest. To the extent so charged, the
8 judgment creditor has only the rights of an assignee. This
9 Article shall not deprive any member of the benefit of any
10 exemption laws applicable to his interest in the limited
11 liability company.
12 (Source: P.A. 87-1062.)
13 (805 ILCS 180/Art. 35 heading)
14 Article 35. Dissolution and Dissociation
15 (805 ILCS 180/35-1)
16 Sec. 35-1. Events causing dissolution and winding up of
17 company's business. A limited liability company is dissolved,
18 and, unless continued pursuant to subsection (b) of Section
19 35-3, its business must be wound up, upon the occurrence of
20 any of the following events:
21 (1) An event specified in the operating agreement.
22 (2) Consent of the number or percentage of members
23 specified in the operating agreement.
24 (3) An event that makes it unlawful for all or
25 substantially all of the business of the company to be
26 continued, but any cure of illegality within 90 days after
27 notice to the company of the event is effective retroactively
28 to the date of the event for purposes of this Section.
29 (4) On application by a member or a dissociated member,
30 upon entry of a judicial decree that:
31 (A) the economic purpose of the company is likely
32 to be unreasonably frustrated;
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1 (B) another member has engaged in conduct relating
2 to the company's business that makes it not reasonably
3 practicable to carry on the company's business with that
4 member;
5 (C) it is not otherwise reasonably practicable to
6 carry on the company's business in conformity with the
7 articles of organization and the operating agreement;
8 (D) the company failed to purchase the petitioner's
9 distributional interest as required by Section 35-60; or
10 (E) the managers or members in control of the
11 company have acted, are acting, or will act in a manner
12 that is illegal, oppressive, or fraudulent with respect
13 to the petitioner.
14 (5) On application by a transferee of a member's
15 interest, a judicial determination that it is equitable to
16 wind up the company's business.
17 (6) Administrative dissolution under Section 35-25. A
18 limited liability company organized under this Act shall be
19 dissolved and its affairs shall be wound up upon the
20 happening of the first to occur of any of the following
21 events:
22 (1) At the time or upon the happening of events
23 specified in the articles of organization.
24 (2) Upon the agreement of the members, which shall be in
25 writing and, unless otherwise provided in the articles of
26 organization, unanimous.
27 (3) Unless provided otherwise in the articles of
28 organization or the operating agreement, upon the death,
29 retirement, resignation, bankruptcy, court declaration of
30 incompetence with respect to, or dissolution of, a member or
31 upon the occurrence of any other event that terminates the
32 continued membership of a member in the limited liability
33 company, unless within 90 days after the event there are at
34 least 2 remaining members and all the remaining members agree
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1 to continue the business of the limited liability company.
2 (4) Entry of a decree of judicial dissolution under
3 Section 35-5.
4 (5) Administrative dissolution under Section 35-25.
5 (Source: P.A. 87-1062.)
6 (805 ILCS 180/35-3 new)
7 Sec. 35-3. Limited liability company continues after
8 dissolution.
9 (a) Subject to subsection (b) of this Section, a limited
10 liability company continues after dissolution only for the
11 purpose of winding up its business.
12 (b) At any time after the dissolution of a limited
13 liability company and before the winding up of its business
14 is completed, the members, including a dissociated member
15 whose dissociation caused the dissolution, may unanimously
16 waive the right to have the company's business wound up and
17 the company terminated. In that case:
18 (1) the limited liability company resumes carrying
19 on its business as if dissolution had never occurred and
20 any liability incurred by the company or a member after
21 the dissolution and before the waiver is determined as if
22 the dissolution had never occurred; and
23 (2) the rights of a third party accruing under
24 subsection (a) of Section 35-7 or arising out of conduct
25 in reliance on the dissolution before the third party
26 knew or received a notification of the waiver are not
27 adversely affected.
28 (805 ILCS 180/35-4 new)
29 Sec. 35-4. Right to wind up limited liability company's
30 business.
31 (a) After dissolution, a member who has not wrongfully
32 dissociated may participate in winding up a limited liability
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1 company's business, but on application of any member,
2 member's legal representative, or transferee, the Circuit
3 Court, for good cause shown, may order judicial supervision
4 of the winding up.
5 (b) A legal representative of the last surviving member
6 may wind up a limited liability company's business.
7 (c) A person winding up a limited liability company's
8 business may preserve the company's business or property as a
9 going concern for a reasonable time, prosecute and defend
10 actions and proceedings, whether civil, criminal, or
11 administrative, settle and close the company's business,
12 dispose of and transfer the company's property, discharge the
13 company's liabilities, distribute the assets of the company
14 pursuant to Section 35-10, settle disputes by mediation or
15 arbitration, and perform other necessary acts.
16 (805 ILCS 180/35-7 new)
17 Sec. 35-7. Member or manager's power and liability as
18 agent after dissolution.
19 (a) A limited liability company is bound by a member or
20 manager's act after dissolution that:
21 (1) is appropriate for winding up the company's
22 business; or
23 (2) would have bound the company under Section 13-5
24 before dissolution, if the other party to the transaction
25 did not have notice of the dissolution.
26 (b) A member or manager who, with knowledge of the
27 dissolution, subjects a limited liability company to
28 liability by an act that is not appropriate for winding up
29 the company's business is liable to the company for any
30 damage caused to the company arising from the liability.
31 (805 ILCS 180/35-10)
32 Sec. 35-10. Distribution of assets in winding up limited
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1 liability company's business upon dissolution.
2 (a) In winding up a limited liability company's
3 business, the assets of the company must be applied to
4 discharge its obligations to creditors, including members who
5 are creditors. Any surplus must be applied to pay in money
6 the net amount distributable to members in accordance with
7 their right to distributions under subsection (b) of this
8 Section.
9 (b) Each member is entitled to a distribution upon the
10 winding up of the limited liability company's business,
11 consisting of a return of all contributions that have not
12 previously been returned and a distribution of any remainder
13 in equal shares. Upon the winding up of a limited liability
14 company, the assets shall be distributed in the following
15 order:
16 (1) to creditors, including members who are creditors,
17 to the extent permitted by law, in satisfaction of
18 liabilities of the limited liability company other than
19 liabilities for distributions to members under Section 25-1
20 or 25-10;
21 (2) except as provided in the operating agreement or in
22 the articles of organization, to members and former members
23 of the limited liability company in satisfaction of the
24 limited liability company's obligations for distributions due
25 and owing under Section 25-1 or 25-10;
26 (3) except as provided in the operating agreement or in
27 the articles of organization, to members of the limited
28 liability company for the return of their contributions; and
29 (4) except as provided in the operating agreement or in
30 the articles of organization, to the members of the limited
31 liability company in the proportions in which the members
32 share in distributions under Section 20-15.
33 (Source: P.A. 87-1062.)
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1 (805 ILCS 180/35-20)
2 Sec. 35-20. Filing of articles of dissolution.
3 (a) Duplicate originals of the articles of dissolution
4 shall be delivered to the Secretary of State. If the
5 Secretary of State finds that the articles of dissolution
6 conform to law, he or she shall, when all required fees have
7 been paid:
8 (1) endorse on each duplicate original the word
9 "Filed" and the date of the filing thereof; and
10 (2) file one duplicate original in his or her
11 office.
12 (b) A duplicate original of the articles of dissolution
13 shall be returned to the representative of the dissolved
14 limited liability company. Upon the filing of the articles
15 of dissolution, the existence of the company shall terminate
16 cease, and its articles of organization shall be deemed
17 cancelled, except for the purpose of suits, other
18 proceedings, and appropriate action as provided in this
19 Article. The manager or managers or member or members at the
20 time of termination dissolution, or those that remain, shall
21 thereafter be trustee trustees for the members and creditors
22 of the terminated dissolved limited liability company and, in
23 that capacity, shall have authority to convey or distribute
24 any company property discovered after termination dissolution
25 and take any other action that may be necessary on behalf of
26 and in the name of the terminated dissolved limited liability
27 company.
28 (Source: P.A. 87-1062.)
29 (805 ILCS 180/35-30)
30 Sec. 35-30. Procedure for administrative dissolution.
31 (a) After the Secretary of State determines that one or
32 more grounds exist under Section 35-25 for the administrative
33 dissolution of a limited liability company, the Secretary of
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1 State shall send a notice of delinquency by regular mail to
2 each delinquent limited liability company at its registered
3 office, or if the limited liability company has failed to
4 maintain a registered office, to the member or manager at the
5 last known office of the member or manager.
6 (b) If the limited liability company does not correct
7 the default within 90 days following the date of the notice
8 of delinquency, the Secretary of State shall thereupon
9 dissolve the limited liability company by issuing a notice of
10 dissolution that recites the grounds for dissolution and its
11 effective date. The Secretary of State shall file the
12 original of the notice in his or her office and mail one copy
13 to the limited liability company at its registered office.
14 (c) Upon the administrative dissolution of a limited
15 liability company, terminates its business existence, and a
16 dissolved limited liability company shall continue for only
17 the purpose of winding up its business. not thereafter carry
18 on any business. However, A dissolved limited liability
19 company may take all action authorized under Section 1-30 or
20 necessary to wind up and liquidate its business and affairs
21 and terminate.
22 (Source: P.A. 87-1062.)
23 (805 ILCS 180/35-45 new)
24 Sec. 35-45. Events causing member's dissociation. A
25 member is dissociated from a limited liability company upon
26 the occurrence of any of the following events:
27 (1) The company's having notice of the member's express
28 will to withdraw upon the date of notice or on a later date
29 specified by the member.
30 (2) An event agreed to in the operating agreement as
31 causing the member's dissociation.
32 (3) Upon transfer of all of a member's distributional
33 interest, other than a transfer for security purposes or a
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1 court order charging the member's distributional interest
2 that has not been foreclosed.
3 (4) The member's expulsion pursuant to the operating
4 agreement.
5 (5) The member's expulsion by unanimous vote of the
6 other members if:
7 (A) it is unlawful to carry on the company's
8 business with the member;
9 (B) there has been a transfer of substantially all
10 of the member's distributional interest, other than a
11 transfer for security purposes or a court order charging
12 the member's distributional interest that has not been
13 foreclosed;
14 (C) within 90 days after the company notifies a
15 corporate member that it will be expelled because it has
16 filed a certificate of dissolution or the equivalent, its
17 charter has been revoked, or its right to conduct
18 business has been suspended by the jurisdiction of its
19 incorporation, the member fails to obtain a revocation of
20 the certificate of dissolution or a reinstatement of its
21 charter or its right to conduct business; or
22 (D) a partnership or a limited liability company
23 that is a member has been dissolved and its business is
24 being wound up.
25 (6) On application by the company or another member, the
26 member's expulsion by judicial determination because the
27 member:
28 (A) engaged in wrongful conduct that adversely and
29 materially affected the company's business;
30 (B) willfully or persistently committed a material
31 breach of the operating agreement or of a duty owed to the
32 company or the other members under Section 15-3; or
33 (C) engaged in conduct relating to the company's
34 business that makes it not reasonably practicable to carry on
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1 the business with the member.
2 (7) The member's:
3 (A) becoming a debtor in bankruptcy;
4 (B) executing an assignment for the benefit of
5 creditors;
6 (C) seeking, consenting to, or acquiescing in the
7 appointment of a trustee, receiver, or liquidator of the
8 member or of all or substantially all of the member's
9 property; or
10 (D) failing, within 90 days after the appointment,
11 to have vacated or stayed the appointment of a trustee,
12 receiver, or liquidator of the member or of all or
13 substantially all of the member's property obtained
14 without the member's consent or acquiescence, or failing
15 within 90 days after the expiration of a stay to have the
16 appointment vacated.
17 (8) In the case of a member who is an individual:
18 (A) the member's death;
19 (B) the appointment of a guardian or general
20 conservator for the member; or
21 (C) a judicial determination that the member has
22 otherwise become incapable of performing the member's
23 duties under the operating agreement.
24 (9) In the case of a member that is a trust or is acting
25 as a member by virtue of being a trustee of a trust,
26 distribution of the trust's entire rights to receive
27 distributions from the company, but not merely by reason of
28 the substitution of a successor trustee.
29 (10) In the case of a member that is an estate or is
30 acting as a member by virtue of being a personal
31 representative of an estate, distribution of the estate's
32 entire rights to receive distributions from the company, but
33 not merely the substitution of a successor personal
34 representative.
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1 (11) Termination of the existence of a member if the
2 member is not an individual, estate, or trust other than a
3 business trust.
4 (805 ILCS 180/35-50 new)
5 Sec. 35-50. Member's power to dissociate; wrongful
6 dissociation.
7 (a) A member has the power to dissociate from a limited
8 liability company at any time, rightfully or wrongfully, by
9 express will under subdivision (1) of Section 35-45.
10 (b) The member's dissociation from a limited liability
11 company is wrongful only if it is in breach of an express
12 provision of the agreement.
13 (c) A member who wrongfully dissociates from a limited
14 liability company is liable to the company and to the other
15 members for damages caused by the dissociation. The
16 liability is in addition to any other obligation of the
17 member to the company or to the other members.
18 (d) If a limited liability company does not dissolve and
19 wind up its business as a result of a member's wrongful
20 dissociation under subsection (b) of this Section, damages
21 sustained by the company for the wrongful dissociation must
22 be offset against distributions otherwise due the member
23 after the dissociation.
24 (805 ILCS 180/35-55 new)
25 Sec. 35-55. Effect of member's dissociation.
26 (a) Upon a member's dissociation the company must cause
27 the dissociated member's distributional interest to be
28 purchased under Section 35-60.
29 (b) Upon a member's dissociation from a limited
30 liability company:
31 (1) the member's right to participate in the
32 management and conduct of the company's business
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1 terminates, except as otherwise provided in Section 35-4,
2 and the member ceases to be a member and is treated the
3 same as a transferee of a member;
4 (2) the member's fiduciary duties terminate, except
5 as provided in subdivision (3) of this subsection (b);
6 and
7 (3) the member's duty of loyalty under subdivisions
8 (1) and (2) of subsection (b) of Section 15-3 and duty of
9 care under subsection (c) of Section 15-3 continue only
10 with regard to matters arising and events occurring
11 before the member's dissociation, unless the member
12 participates in winding up the company's business
13 pursuant to Section 35-4.
14 (805 ILCS 180/35-60 new)
15 Sec. 35-60. Company purchase of distributional interest.
16 (a) A limited liability company shall purchase a
17 distributional interest of a member for its fair value
18 determined as of the date of the member's dissociation if the
19 member's dissociation does not result in a dissolution and
20 winding up of the company's business under Section 35-1.
21 (b) A limited liability company must deliver a purchase
22 offer to the dissociated member whose distributional interest
23 is entitled to be purchased not later than 30 days after the
24 date determined under subsection (a) of this Section. The
25 purchase offer must be accompanied by:
26 (1) a statement of the company's assets and
27 liabilities as of the date determined under subsection
28 (a) of this Section;
29 (2) the latest available balance sheet and income
30 statement, if any; and
31 (3) an explanation of how the estimated amount of
32 the payment was calculated.
33 (c) If the price and other terms of a purchase of a
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1 distributional interest are fixed or are to be determined by
2 the operating agreement, the price and terms so fixed or
3 determined govern the purchase unless the purchaser defaults.
4 If a default occurs, the dissociated member is entitled to
5 commence a proceeding to have the company dissolved under
6 Section 35-1.
7 (d) If an agreement to purchase the distributional
8 interest is not made within 120 days after the date
9 determined under subsection (a) of this Section, the
10 dissociated member, within another 120 days, may commence a
11 proceeding against the limited liability company to enforce
12 the purchase. The company at its expense shall notify in
13 writing all of the remaining members, and any other person
14 the court directs, of the commencement of the proceeding.
15 The jurisdiction of the court in which the proceeding is
16 commenced under this subsection (d) is plenary and exclusive.
17 (e) The court shall determine the fair value of the
18 distributional interest in accordance with the standards set
19 forth in Section 35-65 together with the terms for the
20 purchase. Upon making these determinations, the court shall
21 order the limited liability company to purchase or cause the
22 purchase of the interest.
23 (f) Damages for wrongful dissociation under Section
24 35-50, and all other amounts owing, whether or not currently
25 due, from the dissociated member to a limited liability
26 company, must be offset against the purchase price.
27 (805 ILCS 180/35-65 new)
28 Sec. 35-65. Court action to determine fair value of
29 distributional interest.
30 (a) In an action brought to determine the fair value of
31 a distributional interest in a limited liability company, the
32 court shall:
33 (1) determine the fair value of the interest,
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1 considering among other relevant evidence the going
2 concern value of the company, any agreement among some or
3 all of the members fixing the price or specifying a
4 formula for determining value of distributional interests
5 for any other purpose, the recommendations of any
6 appraiser appointed by the court, and any legal
7 constraints on the company's ability to purchase the
8 interest;
9 (2) specify the terms of the purchase, including,
10 if appropriate, terms for installment payments,
11 subordination of the purchase obligation to the rights of
12 the company's other creditors, security for a deferred
13 purchase price, and a covenant not to compete or other
14 restriction on a dissociated member; and
15 (3) require the dissociated member to deliver an
16 assignment of the interest to the purchaser upon receipt
17 of the purchase price or the first installment of the
18 purchase price.
19 (b) After the dissociated member delivers the
20 assignment, the dissociated member has no further claim
21 against the company, its members, officers, or managers, if
22 any, other than a claim to any unpaid balance of the purchase
23 price and a claim under any agreement with the company or the
24 remaining members that is not terminated by the court.
25 (c) If the purchase is not completed in accordance with
26 the specified terms, the company shall be dissolved upon
27 application under item (D) of subdivision (4) of Section
28 35-1. If a limited liability company is so dissolved, the
29 dissociated member has the same rights and priorities in the
30 company's assets as if the sale had not been ordered.
31 (d) If the court finds that a party to the proceeding
32 acted arbitrarily, vexatiously, or not in good faith, it may
33 award one or more other parties their reasonable expenses,
34 including attorney's fees and the expenses of appraisers or
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1 other experts, incurred in the proceeding. The finding may
2 be based on the company's failure to make an offer to pay or
3 to comply with Section 35-60.
4 (e) Interest must be paid on the amount awarded from the
5 date determined under subsection (a) of Section 35-60 to the
6 date of payment.
7 (805 ILCS 180/35-70 new)
8 Sec. 35-70. Dissociated member's power to bind limited
9 liability company. For 2 years after a member dissociates
10 without the dissociation resulting in a dissolution and
11 winding up of a limited liability company's business, the
12 company, including a surviving company under Article 37, is
13 bound by an act of the dissociated member that would have
14 bound the company under Section 13-5 before dissociation only
15 if at the time of entering into the transaction the other
16 party:
17 (1) reasonably believed that the dissociated member was
18 then a member;
19 (2) did not have notice of the member's dissociation;
20 and
21 (3) is not deemed to have had notice under Section
22 35-15.
23 (805 ILCS 180/Art. 37 heading new)
24 Article 37. Conversions and mergers
25 (805 ILCS 180/37-5 new)
26 Sec. 37-5. Definitions. In this Article:
27 "Corporation" means a corporation under the Business
28 Corporation Act of 1983, a predecessor law, or comparable law
29 of another jurisdiction.
30 "General partner" means a partner in a partnership and a
31 general partner in a limited partnership.
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1 "Limited partner" means a limited partner in a limited
2 partnership.
3 "Limited partnership" means a limited partnership created
4 under the Revised Uniform Limited Partnership Act, a
5 predecessor law, or comparable law of another jurisdiction.
6 "Partner" includes a general partner and a limited
7 partner.
8 "Partnership" means a general partnership under the
9 Uniform Partnership Act, a predecessor law, or comparable law
10 of another jurisdiction.
11 "Partnership agreement" means an agreement among the
12 partners concerning the partnership or limited partnership.
13 "Shareholder" means a shareholder in a corporation.
14 (805 ILCS 180/37-10 new)
15 Sec. 37-10. Conversion of partnership or limited
16 partnership to limited liability company.
17 (a) A partnership or limited partnership may be
18 converted to a limited liability company pursuant to this
19 Section if conversion to a limited liability company is
20 permitted under the law governing the partnership or limited
21 partnership.
22 (b) The terms and conditions of a conversion of a
23 partnership or limited partnership to a limited liability
24 company must be approved by all of the partners or by a
25 number or percentage of the partners required for conversion
26 in the partnership agreement.
27 (c) An agreement of conversion must set forth the terms
28 and conditions of the conversion of the interests of partners
29 of a partnership or of a limited partnership, as the case may
30 be, into interests in the converted limited liability company
31 or the cash or other consideration to be paid or delivered as
32 a result of the conversion of the interests of the partners,
33 or a combination thereof.
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1 (d) After a conversion is approved under subsection (b)
2 of this Section, the partnership or limited partnership shall
3 file articles of organization in the office of the Secretary
4 of State that satisfy the requirements of Section 5-5 and
5 contain all of the following:
6 (1) A statement that the partnership or limited
7 partnership was converted to a limited liability company
8 from a partnership or limited partnership, as the case
9 may be.
10 (2) Its former name.
11 (3) A statement of the number of votes cast by the
12 partners entitled to vote for and against the conversion
13 and, if the vote is less than unanimous, the number or
14 percentage required to approve the conversion under
15 subsection (b) of this Section.
16 (4) In the case of a limited partnership, a
17 statement that the certificate of limited partnership
18 shall be canceled as of the date the conversion took
19 effect.
20 (e) In the case of a limited partnership, the filing of
21 articles of organization under subsection (d) of this Section
22 cancels its certificate of limited partnership as of the date
23 the conversion took effect.
24 (f) A conversion takes effect when the articles of
25 organization are filed in the office of the Secretary of
26 State or on a date specified in the articles of organization
27 not later than 30 days subsequent to the filing of the
28 articles of organization.
29 (g) A general partner who becomes a member of a limited
30 liability company as a result of a conversion remains liable
31 as a partner for an obligation incurred by the partnership or
32 limited partnership before the conversion takes effect.
33 (h) A general partner's liability for all obligations of
34 the limited liability company incurred after the conversion
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1 takes effect is that of a member of the company. A limited
2 partner who becomes a member as a result of a conversion
3 remains liable only to the extent the limited partner was
4 liable for an obligation incurred by the limited partnership
5 before the conversion takes effect.
6 (805 ILCS 180/37-15 new)
7 Sec. 37-15. Effect of conversion; entity unchanged.
8 (a) A partnership or limited partnership that has been
9 converted under this Article is for all purposes the same
10 entity that existed before the conversion.
11 (b) When a conversion takes effect:
12 (1) all property owned by the converting
13 partnership or limited partnership vests in the limited
14 liability company;
15 (2) all debts, liabilities, and other obligations
16 of the converting partnership or limited partnership
17 continue as obligations of the limited liability company;
18 (3) an action or proceeding pending by or against
19 the converting partnership or limited partnership may be
20 continued as if the conversion had not occurred;
21 (4) except as prohibited by other law, all of the
22 rights, privileges, immunities, powers, and purposes of
23 the converting partnership or limited partnership vest in
24 the limited liability company; and
25 (5) except as otherwise provided in the agreement
26 of conversion under Section 37-10, all of the partners of
27 the converting partnership continue as members of the
28 limited liability company.
29 (805 ILCS 180/37-20 new)
30 Sec. 37-20. Merger of entities.
31 (a) Pursuant to a plan of merger approved under
32 subsection (c) of this Section, a limited liability company
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1 may be merged with or into one or more limited liability
2 companies, foreign limited liability companies, corporations,
3 foreign corporations, partnerships, foreign partnerships,
4 limited partnerships, foreign limited partnerships, or other
5 domestic or foreign entities if merger with or into a limited
6 liability company is permitted under the law governing the
7 domestic or foreign entity.
8 (b) A plan of merger must set forth all of the
9 following:
10 (1) The name of each entity that is a party to the
11 merger.
12 (2) The name of the surviving entity into which the
13 other entities will merge.
14 (3) The type of organization of the surviving
15 entity.
16 (4) The terms and conditions of the merger.
17 (5) The manner and basis for converting the
18 interests, shares, obligations, or other securities of
19 each party to the merger into interests, shares,
20 obligations, or other securities of the surviving entity,
21 or into money or other property in whole or in part.
22 (6) The street address of the surviving entity's
23 principal place of business.
24 (c) A plan of merger must be approved:
25 (1) in the case of a limited liability company that
26 is a party to the merger, by all of the members or by a
27 number or percentage of members specified in the
28 operating agreement;
29 (2) in the case of a foreign limited liability
30 company that is a party to the merger, by the vote
31 required for approval of a merger by the law of the state
32 or foreign jurisdiction in which the foreign limited
33 liability company is organized;
34 (3) in the case of a partnership or domestic
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1 limited partnership that is a party to the merger, by the
2 vote required for approval of a conversion under Section
3 37-5(b); and
4 (4) in the case of any other entities that are
5 parties to the merger, by the vote required for approval
6 of a merger by the law of this State or of the state or
7 foreign jurisdiction in which the entity is organized
8 and, in the absence of such a requirement, by all the
9 owners of interests in the entity.
10 (d) After a plan of merger is approved and before the
11 merger takes effect, the plan may be amended or abandoned as
12 provided in the plan.
13 (e) The merger is effective upon the filing of the
14 articles of merger with the Secretary of State, or a later
15 date as specified in the articles of merger not later than 30
16 days subsequent to the filing of the plan of merger under
17 Section 37-25.
18 (805 ILCS 180/37-25 new)
19 Sec. 37-25. Articles of merger.
20 (a) After approval of the plan of merger under Section
21 37-20, unless the merger is abandoned under subsection (d) of
22 Section 37-20, articles of merger must be signed on behalf of
23 each limited liability company and other entity that is a
24 party to the merger and delivered to the Secretary of State
25 for filing. The articles must set forth all of the
26 following:
27 (1) The name and jurisdiction of formation or
28 organization of each of the limited liability companies
29 and other entities that are parties to the merger.
30 (2) For each limited liability company that is to
31 merge, the date its articles of organization were filed
32 with the Secretary of State.
33 (3) That a plan of merger has been approved and
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1 signed by each limited liability company and other entity
2 that is to merge and, if a corporation is a party to the
3 merger, a copy of the plan as approved by the corporation
4 shall be attached to the articles.
5 (4) The name and address of the surviving limited
6 liability company or other surviving entity.
7 (5) The effective date of the merger.
8 (6) If a limited liability company is the surviving
9 entity, any changes in its articles of organization that
10 are necessary by reason of the merger.
11 (7) If a party to a merger is a foreign limited
12 liability company, the jurisdiction and date of filing of
13 its initial articles of organization and the date when
14 its application for authority was filed by the Secretary
15 of State or, if an application has not been filed, a
16 statement to that effect.
17 (8) If the surviving entity is not a limited
18 liability company, an agreement that the surviving entity
19 may be served with process in this State and is subject
20 to liability in any action or proceeding for the
21 enforcement of any liability or obligation of any limited
22 liability company previously subject to suit in this
23 State which is to merge, and for the enforcement, as
24 provided in this Act, of the right of members of any
25 limited liability company to receive payment for their
26 interest against the surviving entity.
27 (b) If a foreign limited liability company is the
28 surviving entity of a merger, it may not do business in this
29 State until an application for that authority is filed with
30 the Secretary of State.
31 (c) The surviving limited liability company or other
32 entity shall furnish a copy of the plan of merger, on request
33 and without cost, to any member of any limited liability
34 company or any person holding an interest in any other entity
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1 that is to merge.
2 (d) To the extent the articles of merger are
3 inconsistent with the limited liability company's articles of
4 organization, the articles of merger shall operate as an
5 amendment to the company's articles of organization.
6 (805 ILCS 180/37-30 new)
7 Sec. 37-30. Effect of merger.
8 (a) When a merger takes effect:
9 (1) the separate existence of each limited
10 liability company and other entity that is a party to the
11 merger, other than the surviving entity, terminates;
12 (2) all property owned by each of the limited
13 liability companies and other entities that are party to
14 the merger vests in the surviving entity;
15 (3) all debts, liabilities, and other obligations
16 of each limited liability company and other entity that
17 is party to the merger become the obligations of the
18 surviving entity;
19 (4) an action or proceeding pending by or against a
20 limited liability company or other party to a merger may
21 be continued as if the merger had not occurred or the
22 surviving entity may be substituted as a party to the
23 action or proceeding; and
24 (5) except as prohibited by other law, all the
25 rights, privileges, immunities, powers, and purposes of
26 every limited liability company and other entity that is
27 a party to a merger vest in the surviving entity.
28 (b) The Secretary of State is an agent for service of
29 process in an action or proceeding against the surviving
30 foreign entity to enforce an obligation of any party to a
31 merger if the surviving foreign entity fails to appoint or
32 maintain an agent designated for service of process in this
33 State or the agent for service of process cannot with
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1 reasonable diligence be found at the designated office.
2 Service is effected under this subsection (b) at the earliest
3 of:
4 (1) the date the company receives the process,
5 notice, or demand;
6 (2) the date shown on the return receipt, if signed
7 on behalf of the company; or
8 (3) 5 days after its deposit in the mail, if mailed
9 postpaid and correctly addressed.
10 (c) Service under subsection (b) of this Section shall
11 be made by the person instituting the action by doing all of
12 the following:
13 (1) Serving on the Secretary of State, or on any
14 employee having responsibility for administering this
15 Act, a copy of the process, notice, or demand, together
16 with any papers required by law to be delivered in
17 connection with service and paying the fee prescribed by
18 Article 50 of this Act.
19 (2) Transmitting notice of the service on the
20 Secretary of State and a copy of the process, notice, or
21 demand and accompanying papers to the surviving entity
22 being served, by registered or certified mail at the
23 address set forth in the articles of merger.
24 (3) Attaching an affidavit of compliance with this
25 Section, in substantially the form that the Secretary of
26 State may by rule prescribe, to the process, notice, or
27 demand.
28 (d) Nothing contained in this Section shall limit or
29 affect the right to serve any process, notice, or demand
30 required or permitted by law to be served upon a limited
31 liability company in any other manner now or hereafter
32 permitted by law.
33 (e) A member of the surviving limited liability company
34 is liable for all obligations of a party to the merger for
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1 which the member was personally liable before the merger.
2 (f) Unless otherwise agreed, a merger of a limited
3 liability company that is not the surviving entity in the
4 merger does not require the limited liability company to wind
5 up its business under this Act or pay its liabilities and
6 distribute its assets under this Act.
7 (805 ILCS 180/37-35 new)
8 Sec. 37-35. Article not exclusive. This Article does not
9 preclude an entity from being converted or merged under other
10 law.
11 (805 ILCS 180/40-1)
12 Sec. 40-1. Right of action. No action shall be brought
13 by a member, or transferee assignee who is entitled to
14 exercise the rights of a member to bring an action, in the
15 right of a limited liability company to recover a judgment in
16 its favor unless members or managers with authority to do so
17 have refused to bring the action or unless an effort to cause
18 those members or managers to bring the action is not likely
19 to succeed.
20 (Source: P.A. 87-1062.)
21 (805 ILCS 180/40-5)
22 Sec. 40-5. Proper plaintiff. No action shall be brought
23 in the right of a limited liability company by a member or
24 transferee assignee who is a substituted member, unless (i)
25 the plaintiff was a member or is a transferee an assignee who
26 was a substituted member at the time of the transaction of
27 which the person complains or (ii) the person's status as a
28 member or a transferee an assignee who is a substituted
29 member had devolved upon him or her by operation of law or
30 under the terms of the operating agreement from a person who
31 was a member or a transferee an assignee who was a
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1 substituted member at the time of the transaction.
2 (Source: P.A. 87-1062.)
3 (805 ILCS 180/45-1)
4 Sec. 45-1. Law governing foreign limited liability
5 companies.
6 (a) Subject to the Constitution of this State, The laws
7 of the State or other jurisdiction under which a foreign
8 limited liability company is organized shall govern its
9 organization and, internal affairs, and the liability of its
10 managers, members, and their transferees.
11 (b) A foreign limited liability company may not be
12 denied admission by reason of any difference between the
13 those laws of another jurisdiction under which the foreign
14 company is organized and the laws of this State.
15 (c) A certificate of authority does not authorize a
16 foreign limited liability company to engage in any business
17 or exercise any power that a limited liability company may
18 not engage in or exercise in this State.
19 (Source: P.A. 87-1062.)
20 (805 ILCS 180/45-5)
21 Sec. 45-5. Admission to transact business.
22 (a) Before transacting business in this State, a foreign
23 limited liability company shall be admitted to do so by the
24 Secretary of State. In order to be admitted, a foreign
25 limited liability company shall submit to the Office of the
26 Secretary of State an application for admission to transact
27 business as a foreign limited liability company setting forth
28 all of the following:
29 (1) The name of the foreign limited liability
30 company and, if different, the name under which it
31 proposes to transact business in this State.
32 (2) The jurisdiction, date of its formation, and
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1 period of duration.
2 (3) A certificate stating that the company is in
3 existence under the laws of the jurisdiction wherein it
4 is organized executed by the Secretary of State of that
5 jurisdiction or by some other official that may have
6 custody of the records pertaining to limited liability
7 companies (or affidavit from an appropriate official of
8 the jurisdiction that good standing certificates are not
9 issued or other evidence of existence which the Secretary
10 of State shall deem appropriate).
11 (4) The name and business address of the proposed
12 registered agent in this State, which registered agent
13 shall be an individual resident of this State, a domestic
14 corporation, or a foreign corporation having a place of
15 business in, and authorized to do business in, this
16 State; if the registered agent is a corporation, the
17 corporation must be authorized by its articles of
18 incorporation to act as a registered agent.
19 (5) The address of the office required to be
20 maintained in the jurisdiction of its organization by the
21 laws of that jurisdiction or, if not so required, of the
22 principal place of business of the foreign limited
23 liability company.
24 (6) The purpose or purposes for which it was
25 organized and the purpose or purposes which it proposes
26 to conduct in the transaction of business in this State.
27 (7) A statement whether the limited liability
28 company is managed by a manager or managers or whether
29 management of the limited liability company is vested in
30 the members.
31 (8) (6) A statement that the Secretary of State is
32 appointed the agent of the foreign limited liability
33 company for service of process under the circumstances
34 set forth in subsection (b) of Section 1-50.
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1 (9) (7) All additional information that may be
2 necessary or appropriate in order to enable the Secretary
3 of State to determine whether the limited liability
4 company is entitled to transact business in this State.
5 (b) No foreign limited liability company shall transact
6 in this State any business that a limited liability company
7 formed under the laws of this State is not permitted to
8 transact. A foreign limited liability company admitted to
9 transact business in this State shall, until admission is
10 revoked as provided in this Act, enjoy the same, but no
11 greater, rights and privileges as a limited liability company
12 formed under the laws of this State.
13 (c) The acceptance and filing by the Office of the
14 Secretary of State of a foreign limited liability company's
15 application shall admit the foreign limited liability company
16 to transact business in the State.
17 (Source: P.A. 87-1062.)
18 (805 ILCS 180/45-35)
19 Sec. 45-35. Revocation of admission.
20 (a) The admission of a foreign limited liability company
21 to transact business in this State may be revoked by the
22 Secretary of State upon the occurrence of any of the
23 following events:
24 (1) The foreign limited company has failed to:
25 (A) file its limited liability company annual
26 report within the time required by Section 50-1 or
27 has failed to pay any fees or penalties prescribed
28 by this Article;
29 (B) appoint and maintain a registered agent as
30 required by this Article;
31 (C) file a report upon any change in the name
32 or business address of the registered agent; or
33 (D) file in the Office of the Secretary of
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1 State any amendment to its application for admission
2 as specified in Section 45-25; or
3 (E) renew its assumed name, or to apply to
4 change its assumed name under this Act, when the
5 limited liability company may only transact business
6 within this State under its assumed name.
7 (2) A misrepresentation has been made of any
8 material matter in any application, report, affidavit, or
9 other document submitted by the foreign limited liability
10 company under this Article.
11 (b) The admission of a foreign limited liability company
12 shall not be revoked by the Secretary of State unless all of
13 the following occur:
14 (1) The Secretary of State has given the foreign
15 limited liability company not less than 60 days' notice
16 thereof by mail addressed to its registered office in
17 this State or, if the foreign limited liability company
18 fails to appoint and maintain a registered agent in this
19 State, addressed to the office required to be maintained
20 under paragraph (5) of subsection (a) of Section 45-5.
21 (2) During that 60 day period, the foreign limited
22 liability company has failed to file the limited
23 liability company report, to pay fees or penalties, to
24 file a report of change regarding the registered agent,
25 to file any amendment, or to correct any
26 misrepresentation.
27 (c) Upon the expiration of 60 days after the mailing of
28 the notice, the admission of the foreign limited liability
29 company to transact business in this State shall cease.
30 (Source: P.A. 87-1062.)
31 (805 ILCS 180/45-65 new)
32 Sec. 45-65. Reinstatement following revocation.
33 (a) A limited liability company whose admission has been
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1 revoked under Section 45-35 may be reinstated by the
2 Secretary of State within 5 years following the date of
3 issuance of the certificate of revocation upon the occurrence
4 of all of the following:
5 (1) The filing of the application for
6 reinstatement.
7 (2) The filing with the Secretary of State by the
8 limited liability company of all reports then due and
9 becoming due.
10 (3) The payment to the Secretary of State by the
11 limited liability company of all fees and penalties then
12 due and becoming due.
13 (b) The application for reinstatement shall be executed
14 and filed in duplicate in accordance with Section 5-45 and
15 shall set forth all of the following:
16 (1) The name of the limited liability company at
17 the time of the issuance of the notice of revocation.
18 (2) If the name is not available for use as
19 determined by the Secretary of State at the time of
20 filing the application for reinstatement, the name of the
21 limited liability company as changed, provided that any
22 change is properly effected under Sections 1-10 and
23 45-25.
24 (3) The date of the issuance of the notice of
25 revocation.
26 (4) The address, including street and number or
27 rural route number of the registered office of the
28 limited liability company upon reinstatement and the name
29 of its registered agent at that address upon the
30 reinstatement of the limited liability company, provided
31 that any change from either the registered office or the
32 registered agent at the time of revocation is properly
33 reported under Section 1-35.
34 (c) When a limited liability company whose admission has
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1 been revoked has complied with the provisions of this
2 Section, the Secretary of State shall issue a certificate of
3 reinstatement.
4 (d) Upon the issuance of the certificate of
5 reinstatement: (i) the admission of the limited liability
6 company to transact business in this State shall be deemed to
7 have continued without interruption from the date of the
8 issuance of the notice of revocation, (ii) the limited
9 liability company shall stand revived with the powers,
10 duties, and obligations as if its admission had not been
11 revoked, and (iii) all acts and proceedings of its members or
12 managers, acting or purporting to act in that capacity, that
13 would have been legal and valid but for the revocation, shall
14 stand ratified and confirmed.
15 (805 ILCS 180/50-1)
16 Sec. 50-1. Annual reports.
17 (a) Each limited liability company organized under the
18 laws of this State and each foreign limited liability company
19 admitted to transact business in this State shall file,
20 within the time prescribed by this Act, an annual report
21 setting forth all of the following:
22 (1) The name of the limited liability company.
23 (2) The address, including street and number or
24 rural route number, of its registered office in this
25 State and the name of its registered agent at that
26 address and a statement of change of its registered
27 office or registered agent, or both, if any.
28 (3) The address, including street and number or
29 rural route number of its principal place of business.
30 (4) The names and addresses of its managers or, if
31 none, the members.
32 (5) Additional information that may be necessary or
33 appropriate in order to enable the Secretary of State to
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1 administer this Act and to verify the proper amount of
2 fees payable by the limited liability company.
3 (6) The annual report shall be made on forms
4 prescribed and furnished by the Secretary of State, and
5 the information therein, required by paragraphs (1)
6 through (4) of subsection (a), both inclusive, shall be
7 given as of the date of execution of the annual report.
8 The annual report shall be executed by a manager or, if
9 none, a member designated by the members pursuant to
10 limited liability company action properly taken under
11 Section 15-1 10-5.
12 (b) The annual report, together with all fees and
13 charges prescribed by this Act, shall be delivered to the
14 Secretary of State within 60 days immediately preceding the
15 first day of the anniversary month. The annual report,
16 together with all fees and charges as prescribed by this Act,
17 shall be deemed to be received by the Secretary of State upon
18 the date of actual receipt thereof by the Secretary of State.
19 If the Secretary of State finds that the report conforms to
20 the requirements of this Act, he or she shall file it. If
21 the Secretary of State finds that it does not so conform, he
22 or she shall promptly return it to the limited liability
23 company for any necessary corrections, in which event the
24 penalties prescribed for failure to file the report within
25 the time provided shall not apply if the report is corrected
26 to conform to the requirements of this Act and returned to
27 the Secretary of State within 30 days of the date the report
28 was returned for corrections.
29 (Source: P.A. 87-1062.)
30 (805 ILCS 180/50-10)
31 Sec. 50-10. Fees.
32 (a) The Secretary of State shall charge and collect in
33 accordance with the provisions of this Act and rules
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1 promulgated under its authority all of the following:
2 (1) Fees for filing documents.
3 (2) Miscellaneous charges.
4 (3) Fees for the sale of lists of filings, copies
5 of any documents, and for the sale or release of any
6 information.
7 (b) The Secretary of State shall charge and collect for
8 all of the following:
9 (1) Filing articles of organization of limited
10 liability companies (domestic), application for admission
11 (foreign), and restated articles of organization
12 (domestic), $400 $500.
13 (2) Filing amendments:, $100.
14 (A) For other than change of registered agent
15 name or registered office, or both, $100.
16 (B) For the purpose of changing the registered
17 agent name or registered office, or both, $25.
18 (3) Filing articles of dissolution or application
19 for withdrawal, $100.
20 (4) Filing an application to reserve a name, $300.
21 (5) Renewal fee for reserved name, $100.
22 (6) Filing a notice of a transfer of a reserved
23 name, $100.
24 (7) Registration of a name, $300.
25 (8) Renewal of registration of a name, $100.
26 (9) Filing an application for use of an assumed
27 name under Section 1-20 of this Act, $20 plus $5 for each
28 month or part thereof between the date of filing the
29 application and the date of the renewal of the assumed
30 name; and a renewal for each assumed name, $300.
31 (10) Filing an application for change of an assumed
32 name, $100.
33 (11) Filing an annual report of a limited liability
34 company or foreign limited liability company, $200 $300,
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1 if filed as required by this Act, plus a penalty if
2 delinquent.
3 (12) Filing an application for reinstatement of a
4 limited liability company or foreign limited liability
5 company and for issuing a certificate of reinstatement,
6 $500.
7 (13) Filing Articles of Merger, $100 plus $50 for
8 each party to the merger in excess of the first 2
9 parties.
10 (14) Filing an Agreement of Conversion or Statement
11 of Conversion, $100.
12 (15) (13) Filing any other document, $100.
13 (c) The Secretary of State shall charge and collect all
14 of the following:
15 (1) For furnishing a copy or certified copy of any
16 document, instrument, or paper relating to a limited
17 liability company or foreign limited liability company,
18 $1 per page, but not less than $25, and $25 for the
19 certificate and for affixing the seal thereto.
20 (2) For the transfer of information by computer
21 process media to any purchaser, fees established by rule.
22 (Source: P.A. 87-1062.)
23 (805 ILCS 180/50-15)
24 Sec. 50-15. Penalty.
25 (a) The Secretary of State shall declare any limited
26 liability company or foreign limited liability company to be
27 delinquent and not in good standing if any of the following
28 occur:
29 (1) It has failed to file its annual report and pay
30 the requisite fee as required by this Act before the
31 first day of the anniversary month in the year in which
32 it is due.
33 (2) It has failed to appoint and maintain a
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1 registered agent in Illinois within 60 days of
2 notification of the Secretary of State by the resigning
3 registered agent.
4 (3) It has failed to report its federal employer
5 identification number to the Secretary of State within 90
6 days as specified in Section 50-30.
7 (b) If the limited liability company or foreign limited
8 liability company has not corrected the default within the
9 time periods prescribed by this Act, the Secretary of State
10 shall be empowered to invoke any of the following penalties:
11 (1) For failure or refusal to comply with
12 subsection (a) of this Section within 60 days after the
13 due date, a penalty of $100 plus increasing by $50 for
14 each additional month or fraction thereof until returned
15 to good standing or until administratively dissolved by
16 the Secretary of State.
17 (2) The Secretary of State shall not file any
18 additional documents, amendments, reports, or other
19 papers relating to any limited liability company or
20 foreign limited liability company organized under or
21 subject to the provisions of this Act until any
22 delinquency under subsection (a) is satisfied.
23 (3) In response to inquiries received in the Office
24 of the Secretary of State from any party regarding a
25 limited liability company that is delinquent, the
26 Secretary of State may show the limited liability company
27 as not in good standing.
28 (Source: P.A. 87-1062.)
29 (805 ILCS 180/55-15 new)
30 Sec. 55-15. Transitional provisions.
31 (a) Before January 1, 2000, this amendatory Act of 1997
32 governs only a limited liability company:
33 (1) organized on or after the effective date of
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1 this amendatory Act of 1997, unless the company is
2 continuing the business of a dissolved limited liability
3 company under this Act; and
4 (2) organized before the effective date of this
5 amendatory Act of 1997, that elects, as provided under
6 subsection (c) of this Section, to be governed by this
7 amendatory Act of 1997.
8 (b) On and after January 1, 2000, this amendatory Act of
9 1997 governs all limited liability companies.
10 (c) Before January 1, 2000, a limited liability company
11 voluntarily may elect, in the manner provided in its
12 operating agreement or by law for amending the operating
13 agreement, to be governed by this amendatory Act of 1997.
14 (805 ILCS 180/60-1)
15 Sec. 60-1. Effective date. This Act takes effect on
16 January 1, 1994.
17 (Source: P.A. 87-1062.)
18 (805 ILCS 180/1-45 rep.)
19 (805 ILCS 180/5-20 rep.)
20 (805 ILCS 180/10-5 rep.)
21 (805 ILCS 180/15-10 rep.)
22 (805 ILCS 180/20-10 rep.)
23 (805 ILCS 180/20-15 rep.)
24 (805 ILCS 180/25-5 rep.)
25 (805 ILCS 180/25-10 rep.)
26 (805 ILCS 180/25-15 rep.)
27 (805 ILCS 180/25-25 rep.)
28 (805 ILCS 180/30-15 rep.)
29 (805 ILCS 180/35-5 rep.)
30 (805 ILCS 180/35-35 rep.)
31 Section 13. The Limited Liability Company Act is amended
32 by repealing Sections 1-45, 5-20, 10-5, 15-10, 20-10, 20-15,
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1 25-5, 25-10, 25-15, 25-25, 30-15, 35-5, and 35-35.
2 Section 15. The Uniform Partnership Act is amended by
3 adding Sections 7.1 and 7.2 as follows:
4 (805 ILCS 205/7.1 new)
5 Sec. 7.1. Merger of partnership and limited liability
6 company.
7 (a) Under a plan of merger approved under subsection (c)
8 of this Section, any one or more partnerships of this State
9 may merge with or into one or more limited liability
10 companies of this State, any other state or states of the
11 United States, or the District of Columbia, if the laws of
12 the other state or states or the District of Columbia permit
13 the merger. The partnership or partnerships and the limited
14 liability company or companies may merge with or into a
15 partnership, which may be any one of these partnerships, or
16 they may merge with or into a limited liability company,
17 which may be any one of these limited liability companies,
18 which shall be a partnership or limited liability company of
19 this State, any other state of the United States, or the
20 District of Columbia, which permits the merger.
21 (b) A plan of merger must set forth all of the
22 following:
23 (1) The name of each entity that is a party to the
24 merger.
25 (2) The name of the surviving entity into which the
26 other entities will merge.
27 (3) The type of organization of the surviving
28 entity.
29 (4) The terms and conditions of the merger.
30 (5) The manner and basis for converting the
31 interests of each party to the merger into interests,
32 obligations, or other securities of the surviving entity,
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1 or into money or other property in whole or in part.
2 (6) The street address of the surviving entity's
3 principal place of business.
4 (c) The plan of merger required by subsection (b) of
5 this Section must be approved by each party to the merger in
6 accordance with all of the following:
7 (1) In the case of a partnership, by all of the
8 partners or by the number or percentage of the partners
9 required to approve a merger in the partnership
10 agreement.
11 (2) In the case of a limited liability company, in
12 accordance with the terms of the limited liability
13 company operating agreement, if any, and in accordance
14 with the laws under which it was formed.
15 (d) After a plan of merger is approved and before the
16 merger takes effect, the plan may be amended or abandoned as
17 provided in the plan of merger.
18 (e) If a partnership or partnerships are merging under
19 this Section, the partnership or partnerships and the limited
20 liability company or companies that are parties to the merger
21 must sign the articles of merger. The articles of merger
22 shall be delivered to the Secretary of State of this State
23 for filing. The articles must set forth all of the
24 following:
25 (1) The name of each partnership and the name and
26 jurisdiction of organization of each limited liability
27 company that is a party to the merger.
28 (2) That a plan of merger has been approved and
29 signed by each partnership and each limited liability
30 company that is a party to the merger.
31 (3) The name and address of the surviving
32 partnership or other surviving entity.
33 (4) The effective date of the merger.
34 (5) If a party to the merger is a foreign limited
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1 liability company, the jurisdiction and date of the
2 filing of its articles of organization and the date when
3 its application for authority was filed with the
4 Secretary of State of this State or, if an application
5 has not been filed, a statement to that effect.
6 (6) If the surviving entity is not a partnership or
7 limited liability company organized under the laws of
8 this State, an agreement that the surviving entity may be
9 served with process in this State and is subject to
10 liability in any action or proceeding for the enforcement
11 of any liability or obligation of any partnership
12 previously subject to suit in this State that is to
13 merge, and for the enforcement, as provided in this Act,
14 of the right of partners of any partnership to receive
15 payment for their interest against the surviving entity.
16 (f) The merger is effective upon the filing of the
17 articles of merger with the Secretary of State of this State,
18 or on a later date as specified in the articles of merger not
19 later than 30 days subsequent to the filing of the plan of
20 merger under subsection (e) of this Section.
21 (g) When any merger becomes effective under this
22 Section:
23 (1) the separate existence of each partnership and
24 each limited liability company that is a party to the
25 merger, other than the surviving entity, terminates;
26 (2) all property owned by each partnership and each
27 limited liability company that is a party to the merger
28 vests in the surviving entity;
29 (3) all debts, liabilities, and other obligations
30 of each partnership and each limited liability company
31 that is a party to the merger become the obligations of
32 the surviving entity;
33 (4) an action or proceeding by or against a
34 partnership or limited liability company that is a party
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1 to the merger may be continued as if the merger had not
2 occurred or the surviving entity may be substituted as a
3 party to the action or proceeding; and
4 (5) except as prohibited by other law, all the
5 rights, privileges, immunities, powers, and purposes of
6 each partnership and limited liability company that is a
7 party to the merger vest in the surviving entity.
8 (h) The Secretary of State of this State is an agent for
9 service of process in an action or proceeding against the
10 surviving foreign entity to enforce an obligation of any
11 party to a merger if the surviving foreign entity fails to
12 appoint or maintain an agent designated for service of
13 process in this State or the agent for service of process
14 cannot with reasonable diligence be found at the designated
15 office. Service is effected under this subsection (h) at the
16 earliest of:
17 (1) the date the surviving entity receives the
18 process notice or demand;
19 (2) the date shown on the return receipt, if signed
20 on behalf of the surviving entity; or
21 (3) 5 days after its deposit in the mail, if mailed
22 postpaid and correctly addressed.
23 (i) Service under subsection (h) of this Section shall
24 be made by the person instituting the action by doing all of
25 the following:
26 (1) Serving on the Secretary of State of this
27 State, or on any employee having responsibility for
28 administering this Act in his or her office, a copy of
29 the process, notice, or demand, together with any papers
30 required by law to be delivered in connection with
31 service and paying the fee prescribed by Section 8.4 of
32 this Act.
33 (2) Transmitting notice of the service on the
34 Secretary of State of this State and a copy of the
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1 process, notice, or demand and accompanying papers to the
2 surviving entity being served, by registered or certified
3 mail at the address set forth in the articles of merger.
4 (3) Attaching an affidavit of compliance with this
5 Section, in substantially the form that the Secretary of
6 State of this State may by rule prescribe, to the
7 process, notice, or demand.
8 (j) Nothing contained in this Section shall limit or
9 affect the right to serve any process, notice, or demand
10 required or permitted by law to be served upon a partnership
11 in any other manner now or hereafter permitted by law.
12 (k) The Secretary of State of this State shall keep, for
13 a period of 5 years from the date of service, a record of all
14 processes, notices, and demands served upon him or her under
15 this Section and shall record the time of the service and the
16 person's action with reference to the service.
17 (l) Except as provided by agreement with a person to
18 whom a general partner of a partnership is obligated, a
19 merger of a partnership that has become effective shall not
20 affect any obligation or liability existing at the time of
21 the merger of a general partner of a partnership that is
22 merging.
23 (805 ILCS 205/7.2 new)
24 Sec. 7.2. Approval of conversion into a limited liability
25 company. A partnership may convert into a limited liability
26 company organized, formed, or created under the laws of this
27 State, upon approval of the conversion in accordance with
28 this Section. If the partnership agreement specifies the
29 manner of approving a conversion of a partnership, the
30 conversion shall be approved as specified in the partnership
31 agreement. If the partnership agreement does not specify the
32 manner of approving a conversion of a partnership and does
33 not prohibit a conversion of the partnership, the conversion
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1 shall be approved in the same manner as is specified in the
2 partnership agreement for approving a merger that involves a
3 partnership as a constituent party to the merger. If the
4 partnership agreement does not specify the manner of
5 approving a merger that involves the partnership as a
6 constituent party or a conversion of a partnership and does
7 not prohibit a conversion of the partnership, the conversion
8 must be approved by all of the partners.
9 After a conversion is approved, the partnership shall
10 file articles of organization in the Office of the Secretary
11 of State in accordance with subsection (d) of Section 37-10
12 of the Limited Liability Company Act.
13 Section 20. The Revised Uniform Limited Partnership Act
14 is amended by adding Sections 210 and 211 as follows:
15 (805 ILCS 210/210 new)
16 Sec. 210. Merger of limited partnership and limited
17 liability company.
18 (a) Under a plan of merger approved under subsection (c)
19 of this Section, any one or more limited partnerships may
20 merge with or into one or more limited liability companies of
21 this State, any other state or states of the United States,
22 or the District of Columbia, if the laws of the other state
23 or states or the District of Columbia permit the merger. The
24 limited partnership or partnerships and the limited liability
25 company or companies may merge with or into a limited
26 partnership, which may be any one of these limited
27 partnerships, or they may merge with or into a limited
28 liability company, which may be any one of these limited
29 liability companies, which shall be a limited partnership or
30 limited liability company of this State, any other state of
31 the United States, or the District of Columbia, which permits
32 the merger.
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1 (b) A plan of merger must set forth all of the
2 following:
3 (1) The name of each entity that is a party to the
4 merger.
5 (2) The name of the surviving entity into which the
6 other entities will merge.
7 (3) The type of organization of the surviving
8 entity.
9 (4) The terms and conditions of the merger.
10 (5) The manner and basis for converting the
11 interests, obligations, or other securities of each party
12 to the merger into interests, obligations, or securities
13 of the surviving entity, or into money or other property
14 in whole or in part.
15 (6) The street address of the surviving entity's
16 principal place of business.
17 (c) The plan of merger required by subsection (b) of
18 this Section must be approved by each party to the merger in
19 accordance with all of the following:
20 (1) In the case of a domestic limited partnership,
21 by all of the partners or by the number or percentage of
22 the partners required to approve a merger in the
23 partnership agreement.
24 (2) In the case of a limited liability company, in
25 accordance with the terms of the limited liability
26 company operating agreement, if any, and in accordance
27 with the laws under which it was formed.
28 (d) After a plan of merger is approved and before the
29 merger takes effect, the plan may be amended or abandoned as
30 provided in the plan of merger.
31 (e) If a limited partnership or partnerships are merging
32 under this Section, the limited partnership or partnerships
33 and the limited liability company or companies that are
34 parties to the merger must sign the articles of merger. The
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1 articles of merger shall be delivered to the Secretary of
2 State of this State for filing. The articles must set forth
3 all of the following:
4 (1) The name of each limited partnership and the
5 name and jurisdiction of organization of each limited
6 liability company that is a party to the merger.
7 (2) For each limited partnership that is to merge,
8 the date its certificate of limited partnership was filed
9 with the Secretary of State.
10 (3) That a plan of merger has been approved and
11 signed by each limited partnership and each limited
12 liability company that is a party to the merger.
13 (4) The name and address of the surviving limited
14 partnership or surviving limited liability company.
15 (5) The effective date of the merger.
16 (6) If a limited partnership is the surviving
17 entity, any changes in its certificate of limited
18 partnership that are necessary by reason of the merger.
19 (7) If a party to the merger is a foreign limited
20 liability company, the jurisdiction and date of the
21 filing of its articles of organization and the date when
22 its application for authority was filed with the
23 Secretary of State of this State or, if an application
24 has not been filed, a statement to that effect.
25 (8) If the surviving entity is not a domestic
26 limited partnership or limited liability company
27 organized under the laws of this State, an agreement that
28 the surviving entity may be served with process in this
29 State and is subject to liability in any action or
30 proceeding for the enforcement of any liability or
31 obligation of any limited partnership previously subject
32 to suit in this State that is to merge, and for the
33 enforcement, as provided in this Act, of the right of
34 partners of any limited partnership to receive payment
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1 for their interest against the surviving entity.
2 (f) The merger is effective upon the filing of the
3 articles of merger with the Secretary of State of this State,
4 or on a later date as specified in the articles of merger not
5 later than 30 days subsequent to the filing of the plan of
6 merger under subsection (e) of this Section.
7 (g) Upon the merger becoming effective, articles of
8 merger shall act as a certificate of cancellation for a
9 domestic limited partnership which is not the surviving
10 entity of the merger.
11 (h) Upon the merger becoming effective, articles of
12 merger may operate as an amendment to the certificate of
13 limited partnership of the limited partnership which is the
14 surviving entity of the merger.
15 (i) When any merger becomes effective under this
16 Section:
17 (1) the separate existence of each limited
18 partnership and each limited liability company that is a
19 party to the merger, other than the surviving entity,
20 terminates;
21 (2) all property owned by each limited partnership
22 and each limited liability company that is a party to the
23 merger vests in the surviving entity;
24 (3) all debts, liabilities, and other obligations
25 of each limited partnership and each limited liability
26 company that is a party to the merger become the
27 obligations of the surviving entity;
28 (4) an action or proceeding by or against a limited
29 partnership or limited liability company that is a party
30 to the merger may be continued as if the merger had not
31 occurred or the surviving entity may be substituted as a
32 party to the action or proceeding; and
33 (5) except as prohibited by other law, all the
34 rights, privileges, immunities, powers, and purposes of
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1 each limited partnership and each limited liability
2 company that is a party to the merger vest in the
3 surviving entity.
4 (j) The Secretary of State of this State is an agent for
5 service of process in an action or proceeding against the
6 surviving foreign entity to enforce an obligation of any
7 party to a merger if the surviving foreign entity fails to
8 appoint or maintain an agent designated for service of
9 process in this State or the agent for service of process
10 cannot with reasonable diligence be found at the designated
11 office. Service is effected under this subsection (j) at the
12 earliest of:
13 (1) the date the surviving entity receives the
14 process, notice, or demand;
15 (2) the date shown on the return receipt, if signed
16 on behalf of the surviving entity; or
17 (3) 5 days after its deposit in the mail, if mailed
18 postpaid and correctly addressed.
19 (k) Service under subsection (j) of this Section shall
20 be made by the person instituting the action by doing all of
21 the following:
22 (1) Serving on the Secretary of State of this
23 State, or on any employee having responsibility for
24 administering this Act in his or her office, a copy of
25 the process, notice, or demand, together with any papers
26 required by law to be delivered in connection with
27 service and paying the fee prescribed by subsection (b)
28 of Section 1102 of this Act.
29 (2) Transmitting notice of the service on the
30 Secretary of State of this State and a copy of the
31 process, notice, or demand and accompanying papers to the
32 surviving entity being served, by registered or certified
33 mail at the address set forth in the articles of merger.
34 (3) Attaching an affidavit of compliance with this
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1 Section, in substantially the form that the Secretary of
2 State of this State may by rule prescribe, to the
3 process, notice, or demand.
4 (l) Nothing contained in this Section shall limit or
5 affect the right to serve any process, notice, or demand
6 required or permitted by law to be served upon a limited
7 partnership in any other manner now or hereafter permitted by
8 law.
9 (m) The Secretary of State of this State shall keep, for
10 a period of 5 years from the date of service, a record of all
11 processes, notices, and demands served upon him or her under
12 this Section and shall record the time of the service and the
13 person's action with reference to the service.
14 (n) Except as provided by agreement with a person to
15 whom a general partner of a limited partnership is obligated,
16 a merger of a limited partnership that has become effective
17 shall not affect any obligation or liability existing at the
18 time of the merger of a general partner of a limited
19 partnership that is merging.
20 (o) If a limited partnership is a constituent party to a
21 merger that has become effective, but the limited partnership
22 is not the surviving entity of the merger, then a judgment
23 creditor of a general partner of the limited partnership may
24 not levy execution against the assets of the general partner
25 to satisfy a judgment based on a claim against the surviving
26 entity of the merger unless:
27 (1) a judgment based on the same claim has been
28 obtained against the surviving entity of the merger and a
29 writ of execution on the judgment has been returned
30 unsatisfied in whole or in part;
31 (2) the surviving entity of the merger is a debtor
32 in bankruptcy;
33 (3) the general partner has agreed that the
34 creditor need not exhaust the assets of the limited
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1 partnership that was not the surviving entity of the
2 merger;
3 (4) the general partner has agreed that the
4 creditor need not exhaust the assets of the surviving
5 entity of the merger;
6 (5) a court grants permission to the judgment
7 creditor to levy execution against the assets of the
8 general partner based on a finding that the assets of the
9 surviving entity of the merger that are subject to
10 execution are insufficient to satisfy the judgment, that
11 exhaustion of the assets of the surviving entity of the
12 merger is excessively burdensome, or that grant of
13 permission is an appropriate exercise of the court's
14 equitable powers; or
15 (6) liability is imposed on the general partner by
16 law or contract independent of the existence of the
17 surviving entity of the merger.
18 (805 ILCS 210/211 new)
19 Sec. 211. Approval of conversion into a limited
20 liability company. A limited partnership may convert into a
21 limited liability company organized, formed, or created under
22 the laws of this State, upon approval of the conversion in
23 accordance with this Section. If the partnership agreement
24 specifies the manner of approving a conversion of a limited
25 partnership, the conversion shall be approved as specified in
26 the partnership agreement. If the partnership agreement does
27 not specify the manner of approving a conversion of a limited
28 partnership and does not prohibit a conversion of the limited
29 partnership, the conversion shall be approved in the same
30 manner as is specified in the partnership agreement for
31 approving a merger that involves a limited partnership as a
32 constituent party to the merger. If the partnership
33 agreement does not specify the manner of approving a merger
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1 that involves the limited partnership as a constituent party
2 or a conversion of a limited partnership and does not
3 prohibit a conversion of the limited partnership, the
4 conversion must be approved by all of the partners.
5 After a conversion is approved, the limited partnership
6 shall file articles of organization in the Office of the
7 Secretary of State in accordance with subsection (d) of
8 Section 37-10 of the Limited Liability Company Act.
9 Section 99. Effective date. This Act takes effect on
10 January 1, 1998.