Illinois General Assembly - Full Text of Public Act 096-0263
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Public Act 096-0263


 

Public Act 0263 96TH GENERAL ASSEMBLY



 


 
Public Act 096-0263
 
HB1336 Enrolled LRB096 10290 KTG 20460 b

    AN ACT concerning business.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Limited Liability Company Act is amended by
changing Section 15-3 as follows:
 
    (805 ILCS 180/15-3)
    Sec. 15-3. General standards of member and manager's
conduct.
    (a) The fiduciary duties a member owes to a member-managed
company and its other members include the duty of loyalty and
the duty of care referred to in subsections (b) and (c) of this
Section.
    (b) A member's duty of loyalty to a member-managed company
and its other members includes the following:
        (1) to account to the company and to hold as trustee
    for it any property, profit, or benefit derived by the
    member in the conduct or winding up of the company's
    business or derived from a use by the member of the
    company's property, including the appropriation of a
    company's opportunity;
        (2) to act fairly when a member deals with the company
    in the conduct or winding up of the company's business as
    or on behalf of a party having an interest adverse to the
    company; and
        (3) to refrain from competing with the company in the
    conduct of the company's business before the dissolution of
    the company.
    (c) A member's duty of care to a member-managed company and
its other members in the conduct of and winding up of the
company's business is limited to refraining from engaging in
grossly negligent or reckless conduct, intentional misconduct,
or a knowing violation of law.
    (d) A member shall discharge his or her duties to a
member-managed company and its other members under this Act or
under the operating agreement and exercise any rights
consistent with the obligation of good faith and fair dealing.
    (e) A member of a member-managed company does not violate a
duty or obligation under this Act or under the operating
agreement merely because the member's conduct furthers the
member's own interest.
    (f) This Section applies to a person winding up the limited
liability company's business as the personal or legal
representative of the last surviving member as if the person
were a member.
    (g) In a manager-managed company:
        (1) a member who is not also a manager owes no duties
    to the company or to the other members solely by reason of
    being a member;
        (2) a manager is held to the same standards of conduct
    prescribed for members in subsections (b), (c), (d), and
    (e) of this Section;
        (3) a member who pursuant to the operating agreement
    exercises some or all of the authority of a manager in the
    management and conduct of the company's business is held to
    the standards of conduct in subsections (b), (c), (d), and
    (e) of this Section to the extent that the member exercises
    the managerial authority vested in a manager by this Act;
    and
        (4) a manager is relieved of liability imposed by law
    for violations of the standards prescribed by subsections
    (b), (c), (d), and (e) to the extent of the managerial
    authority delegated to the members by the operating
    agreement.
(Source: P.A. 95-331, eff. 8-21-07.)

Effective Date: 1/1/2010