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| Public Act 096-0263 |
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AN ACT concerning business.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Limited Liability Company Act is amended by | ||||
changing Section 15-3 as follows:
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(805 ILCS 180/15-3)
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Sec. 15-3. General standards of member and manager's | ||||
conduct.
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(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.
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(b) A member's duty of loyalty to a member-managed company | ||||
and its other
members includes the following:
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(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;
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(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
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(3) to refrain from competing with the company in the | ||
conduct of the
company's business before the dissolution of | ||
the company.
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(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.
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(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.
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(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.
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(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.
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(g) In a manager-managed company:
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(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;
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(2) a manager is held to the same standards of conduct | ||
prescribed for
members in subsections (b), (c), (d), and | ||
(e) of this Section;
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(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
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(4) a manager is relieved of liability imposed by law | ||
for violations of
the
standards prescribed by subsections
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(b), (c), (d), and (e) to the extent of the managerial | ||
authority delegated to
the members by the operating | ||
agreement.
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(Source: P.A. 95-331, eff. 8-21-07.)
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