HB2860 EnrolledLRB101 05042 TAE 50052 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Entity Omnibus Act is amended by changing
5Sections 103, 202, 203, 205, 206, 302, 305, and 306 and by
6adding Sections 110 and 111 as follows:
 
7    (805 ILCS 415/103)
8    Sec. 103. Relationship of Act to other laws.
9    (a) Unless displaced by particular provisions of this Act
10or the organic law, the principles of law and equity supplement
11this Act.
12    (b) This Act does not authorize an act prohibited by, and
13does not affect, the application or requirements of law, other
14than this Act.
15    (c) A transaction effected under this Act may not create or
16impair any right or obligation on the part of a person under a
17provision of the law of this State other than this Act relating
18to a transaction involving a converting or domesticating entity
19unless:
20        (1) in the event the entity does not survive the
21    transaction, the transaction satisfies any requirements of
22    the provision; or
23        (2) in the event the entity survives the transaction,

 

 

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1    the approval of the plan is by a vote of the interest
2    holders or governors which would be sufficient to create or
3    impair the right or obligation directly under the
4    provision.
5(Source: P.A. 100-561, eff. 7-1-18.)
 
6    (805 ILCS 415/110 new)
7    Sec. 110. Interrogatories to be propounded by the Secretary
8of State.
9    (a) The Secretary of State may propound to any entity,
10domestic or foreign, subject to the provisions of this Act, and
11to any governor or interest holder thereof, such
12interrogatories as may be reasonably necessary and proper to
13enable the Secretary to ascertain whether the entity has
14complied with all the provisions of this Act applicable to the
15entity. The interrogatories shall be answered within 30 days
16after the mailing thereof, or within such additional time as
17shall be fixed by the Secretary of State, and the answers
18thereto shall be full and complete and shall be made in writing
19and under oath. If the interrogatories are directed to an
20individual, they shall be answered by him or her, and if
21directed to an entity, they shall be answered by the governor
22or interest holder thereof. The Secretary of State need not
23file any document to which the interrogatories relate until the
24interrogatories are answered as herein provided, and not then
25if the answers thereto disclose that the document is not in

 

 

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1conformity with the provisions of this Act. The Secretary of
2State shall certify to the Attorney General, for such action as
3the Attorney General may deem appropriate, all interrogatories
4and answers thereto that disclose a violation of any of the
5provisions of this Act.
6    (b) Interrogatories propounded by the Secretary of State
7and the answers thereto shall not be open to public inspection
8nor shall the Secretary of State disclose any facts or
9information obtained therefrom except in so far as official
10duty may require the same to be made public or if the
11interrogatories or the answers thereto are required for
12evidence in any criminal proceeding or in any other action by
13the State.
 
14    (805 ILCS 415/111 new)
15    Sec. 111. Application of other Acts. The Business
16Corporation Act of 1983, the General Not For Profit Corporation
17Act of 1986, the Limited Liability Company Act, the Uniform
18Limited Partnership Act (2001), and the Uniform Partnership Act
19(1997), as now or hereafter amended, shall govern all matters
20related to the entities named in each of those Acts and in this
21Act except where inconsistent with the letter and purpose of
22this Act. This Act controls in the event of any conflict with
23the provisions of the above-named Acts or other laws.
 
24    (805 ILCS 415/202)

 

 

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1    Sec. 202. Plan of conversion.
2    (a) A domestic entity may convert to a different type of
3entity under this Article by approving a plan of conversion.
4The plan must be in a record and contain:
5        (1) the name and type of the converting entity;
6        (2) the name, jurisdiction of organization, and type of
7    the converted entity;
8        (3) the manner of converting the interests in the
9    converting entity into interests, securities, obligations,
10    rights to acquire interests or securities, cash, or other
11    property, or any combination of the foregoing;
12        (4) the proposed public organic document of the
13    converted entity if it will be a filing entity;
14        (5) the full text of the private organic rules of the
15    converted entity that are proposed to be in a record;
16        (6) the other terms and conditions of the conversion;
17    and
18        (7) any other provision required by the law of this
19    State or the organic rules of the converting entity.
20    (b) A plan of conversion may contain any other provision
21not prohibited by law.
22    (c) The entity shall maintain the plan of conversion in
23accordance with the entity's policy for maintaining books and
24records.
25(Source: P.A. 100-561, eff. 7-1-18.)
 

 

 

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1    (805 ILCS 415/203)
2    Sec. 203. Approval of conversion.
3    (a) A plan of conversion is not effective unless it has
4been approved:
5        (1) by a domestic converting entity:
6            (A) in accordance with the requirements, if any, in
7        its organic rules for approval of a conversion;
8            (B) if its organic rules do not provide for
9        approval of a conversion, in accordance with the
10        requirements, if any, in its organic law and organic
11        rules for approval of:
12                (i) in the case of an entity that is not a
13            business corporation, a merger, as if the
14            conversion were a merger; or
15                (ii) in the case of a business corporation, a
16            merger requiring approval by a vote of the interest
17            holders of the business corporation, as if the
18            conversion were that type of merger; or
19            (C) if neither its organic law nor organic rules
20        provide for approval of a conversion or a merger
21        described in subparagraph (B)(ii), by all of the
22        interest holders of the entity entitled to vote on or
23        consent to any matter; and
24        (2) in a record, by each interest holder of a domestic
25    converting entity that will have interest holder liability
26    for liabilities that arise after the conversion becomes

 

 

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1    effective. , unless, in the case of an entity that is not a
2    business or nonprofit corporation:
3            (A) the organic rules of the entity provide in a
4        record for the approval of a conversion or a merger in
5        which some or all of its interest holders become
6        subject to interest holder liability by the vote or
7        consent of fewer than all of the interest holders; and
8            (B) the interest holder voted for or consented in a
9        record to that provision of the organic rules or became
10        an interest holder after the adoption of that
11        provision.
12    (b) A conversion of a foreign converting entity is not
13effective unless it is approved by the foreign entity in
14accordance with the law of the foreign entity's jurisdiction of
15organization.
16(Source: P.A. 100-561, eff. 7-1-18.)
 
17    (805 ILCS 415/205)
18    Sec. 205. Statement of conversion; effective date.
19    (a) A statement of conversion must be signed on behalf of
20the converting entity and filed with the Secretary of State.
21    (b) A statement of conversion must contain:
22        (1) the name and type of the converting entity;
23        (2) the name and type of the converted entity;
24        (3) if the statement of conversion is not to be
25    effective upon filing, the later date and time on which it

 

 

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1    will become effective, which may not be more than 90 days
2    after the date of filing;
3        (4) a statement that the plan of conversion was
4    approved in accordance with this Article;
5        (5) the text of the converted entity's public organic
6    document, as an attachment, signed by a person authorized
7    by the entity; and
8        (6) if the converted entity is a domestic limited
9    liability partnership, the text of its statement of
10    qualification, as an attachment, signed by a person
11    authorized by the entity.
12    (c) In addition to the requirements of subsection (b), a
13statement of conversion may contain any other provision not
14prohibited by law.
15    (d) If the converted entity is a domestic entity, its
16public organic document, if any, must satisfy the requirements
17of the law of this State and may omit any provision that is not
18required to be included in a restatement of the public organic
19document.
20    (e) (Blank). A plan of conversion that is signed on behalf
21of a domestic converting entity and meets all of the
22requirements of subsection (b) may be filed with the Secretary
23of State instead of a statement of conversion and upon filing
24has the same effect. If a plan of conversion is filed as
25provided in this subsection, references in this Act to a
26statement of conversion refer to the plan of conversion filed

 

 

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1under this subsection.
2    (f) A statement of conversion becomes effective upon the
3date and time of filing or the later date and time specified in
4the statement of conversion.
5(Source: P.A. 100-561, eff. 7-1-18.)
 
6    (805 ILCS 415/206)
7    Sec. 206. Effect of conversion.
8    (a) When a conversion becomes effective:
9        (1) the converted entity is:
10            (A) organized under and subject to the organic law
11        of the converted entity; and
12            (B) the same entity without interruption as the
13        converting entity, even though the organic law of the
14        converted entity to may require or allow the name of
15        the converted entity may be modified based on the type
16        of entity;
17        (2) all property of the converting entity continues to
18    be vested in the converted entity without assignment,
19    reversion, or impairment;
20        (3) all liabilities of the converting entity continue
21    as liabilities of the converted entity;
22        (4) except as provided by law other than this Act or
23    the plan of conversion, all of the rights, privileges,
24    immunities, powers, and purposes of the converting entity
25    remain in the converted entity;

 

 

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1        (5) the name of the converted entity may be substituted
2    for the name of the converting entity in any pending action
3    or proceeding;
4        (6) if a converted entity is a filing entity, its
5    public organic document is effective and is binding on its
6    interest holders;
7        (7) if the converted entity is a limited liability
8    partnership, its statement of qualification is effective
9    simultaneously;
10        (8) the private organic rules of the converted entity
11    that are to be in a record, if any, approved as part of the
12    plan of conversion are effective and are binding on and
13    enforceable by:
14            (A) its interest holders; and
15            (B) in the case of a converted entity that is not a
16        business corporation or nonprofit corporation, any
17        other person that is a party to an agreement that is
18        part of the entity's private organic rules; and
19        (9) the interests in the converting entity are
20    converted, and the interest holders of the converting
21    entity are entitled only to the rights provided to them
22    under the plan of conversion and to any appraisal rights
23    they have under Section 109 and the converting entity's
24    organic law.
25    (b) Except as otherwise provided in the organic law or
26organic rules of the converting entity, the conversion does not

 

 

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1give rise to any rights that an interest holder, governor, or
2third party would otherwise have upon a dissolution,
3liquidation, or winding-up of the converting entity.
4    (c) When a conversion becomes effective, a person that did
5not have interest holder liability with respect to the
6converting entity and that becomes subject to interest holder
7liability with respect to a domestic entity as a result of a
8conversion has interest holder liability only to the extent
9provided by the organic law of the entity and only for those
10liabilities that arise after the conversion becomes effective.
11    (d) When a conversion becomes effective:
12        (1) the conversion does not discharge any interest
13    holder liability under the organic law of a domestic
14    converting entity to the extent the interest holder
15    liability arose before the conversion became effective;
16        (2) a person does not have interest holder liability
17    under the organic law of a domestic converting entity for
18    any liability that arises after the conversion becomes
19    effective;
20        (3) the organic law of a domestic converting entity
21    continues to apply to the release, collection, or discharge
22    of any interest holder liability preserved under paragraph
23    (1) as if the conversion had not occurred; and
24        (4) a person has whatever rights of contribution from
25    any other person as are provided by the organic law or
26    organic rules of the domestic converting entity with

 

 

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1    respect to any interest holder liability preserved under
2    paragraph (1) as if the conversion had not occurred.
3    (e) When a conversion becomes effective, a foreign entity
4that is the converted entity:
5        (1) may be served with process in this State for the
6    collection and enforcement of any of its liabilities; and
7        (2) appoints the Secretary of State as its agent for
8    service of process for collecting or enforcing those
9    liabilities.
10    (f) If the converting entity is a qualified foreign entity,
11the certificate of authority or other foreign qualification of
12the converting entity is canceled when the conversion becomes
13effective.
14    (g) A conversion does not require the entity to wind up its
15affairs and does not constitute or cause the dissolution of the
16entity.
17(Source: P.A. 100-561, eff. 7-1-18.)
 
18    (805 ILCS 415/302)
19    Sec. 302. Plan of domestication.
20    (a) A domestic entity may become a foreign entity in a
21domestication by approving a plan of domestication. The plan
22must be in a record and contain:
23        (1) the name and type of the domesticating entity;
24        (2) the name and jurisdiction of organization of the
25    domesticated entity;

 

 

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1        (3) the manner of converting the interests in the
2    domesticating entity into interests, securities,
3    obligations, rights to acquire interests or securities,
4    cash, or other property, or any combination of the
5    foregoing;
6        (4) the proposed public organic document of the
7    domesticated entity if it is a filing entity;
8        (5) the full text of the private organic rules of the
9    domesticated entity that are proposed to be in a record;
10        (6) the other terms and conditions of the
11    domestication; and
12        (7) any other provision required by the law of this
13    State or the organic rules of the domesticating entity.
14    (b) A plan of domestication may contain any other provision
15not prohibited by law.
16    (c) The entity shall maintain the plan of domestication in
17accordance with the entity's policy for maintaining books and
18records.
19(Source: P.A. 100-561, eff. 7-1-18.)
 
20    (805 ILCS 415/305)
21    Sec. 305. Statement of domestication; effective date.
22    (a) A statement of domestication must be signed on behalf
23of the domesticating entity and filed with the Secretary of
24State.
25    (b) A statement of domestication must contain:

 

 

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1        (1) the name, jurisdiction of organization, and type of
2    the domesticating entity;
3        (2) the name and jurisdiction of organization of the
4    domesticated entity;
5        (3) if the statement of domestication is not to be
6    effective upon filing, the later date and time on which it
7    will become effective, which may not be more than 30 90
8    days after the date of filing;
9        (4) if the domesticating entity is a domestic entity, a
10    statement that the plan of domestication was approved in
11    accordance with this Article or, if the domesticating
12    entity is a foreign entity, a statement that the
13    domestication was approved in accordance with the law of
14    its jurisdiction of organization;
15        (5) if the domesticated entity is a domestic filing
16    entity, its public organic document, as an attachment
17    signed by a person authorized by the entity;
18        (6) if the domesticated entity is a domestic limited
19    liability partnership, its statement of qualification, as
20    an attachment; and
21        (7) if the domesticated entity is a foreign entity that
22    is not a qualified foreign entity, a mailing address to
23    which the Secretary of State may send any process served on
24    the Secretary of State pursuant to subsection (e) of
25    Section 306.
26    (c) In addition to the requirements of subsection (b), a

 

 

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1statement of domestication may contain any other provision not
2prohibited by law.
3    (d) If the domesticated entity is a domestic entity, its
4public organic document, if any, must satisfy the requirements
5of the law of this State and may omit any provision that is not
6required to be included in a restatement of the public organic
7document.
8    (e) A statement of domestication becomes effective upon the
9date and time of filing or the later date and time specified in
10the statement of domestication.
11(Source: P.A. 100-561, eff. 7-1-18.)
 
12    (805 ILCS 415/306)
13    Sec. 306. Effect of domestication.
14    (a) When a domestication becomes effective:
15        (1) the domesticated entity is:
16            (A) organized under and subject to the organic law
17        of the domesticated entity; and
18            (B) the same entity without interruption as the
19        domesticating entity, even though the organic law of
20        the domesticated entity may require or allow the name
21        of the domesticated entity to be modified;
22        (2) all property of the domesticating entity continues
23    to be vested in the domesticated entity without assignment,
24    reversion, or impairment;
25        (3) all liabilities of the domesticating entity

 

 

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1    continue as liabilities of the domesticated entity;
2        (4) except as provided by law other than this Act or
3    the plan of domestication, all of the rights, privileges,
4    immunities, powers, and purposes of the domesticating
5    entity remain in the domesticated entity;
6        (5) the name of the domesticated entity may be
7    substituted for the name of the domesticating entity in any
8    pending action or proceeding;
9        (6) if the domesticated entity is a filing entity, its
10    public organic document is effective and is binding on its
11    interest holders;
12        (7) the private organic rules of the domesticated
13    entity that are to be in a record, if any, approved as part
14    of the plan of domestication are effective and are binding
15    on and enforceable by:
16            (A) its interest holders; and
17            (B) in the case of a domesticated entity that is
18        not a business corporation or nonprofit corporation,
19        any other person that is a party to an agreement that
20        is part of the domesticated entity's private organic
21        rules; and
22        (8) the interests in the domesticating entity are
23    converted to the extent and as approved in connection with
24    the domestication, and the interest holders of the
25    domesticating entity are entitled only to the rights
26    provided to them under the plan of domestication and to any

 

 

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1    appraisal rights they have under Section 109 and the
2    domesticating entity's organic law.
3    (b) Except as otherwise provided in the organic law or
4organic rules of the domesticating entity, the domestication
5does not give rise to any rights that an interest holder,
6governor, or third party would otherwise have upon a
7dissolution, liquidation, or winding-up of the domesticating
8entity.
9    (c) When a domestication becomes effective, a person that
10did not have interest holder liability with respect to the
11domesticating entity and that becomes subject to interest
12holder liability with respect to a domestic entity as a result
13of the domestication has interest holder liability only to the
14extent provided by the organic law of the entity and only for
15those liabilities that arise after the domestication becomes
16effective.
17    (d) When a domestication becomes effective:
18        (1) the domestication does not discharge any interest
19    holder liability under the organic law of a domestic
20    domesticating entity to the extent the interest holder
21    liability arose before the domestication became effective;
22        (2) a person does not have interest holder liability
23    under the organic law of a domestic domesticating entity
24    for any liability that arises after the domestication
25    becomes effective;
26        (3) the organic law of a domestic domesticating entity

 

 

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1    continues to apply to the release, collection, or discharge
2    of any interest holder liability preserved under paragraph
3    (1) as if the domestication had not occurred; and
4        (4) a person has whatever rights of contribution from
5    any other person as are provided by the organic law or
6    organic rules of a domestic domesticating entity with
7    respect to any interest holder liability preserved under
8    paragraph (1) as if the domestication had not occurred.
9    (e) When a domestication becomes effective, a foreign
10entity that is the domesticated entity:
11        (1) may be served with process in this State for the
12    collection and enforcement of any of its liabilities; and
13        (2) appoints the Secretary of State as its agent for
14    service of process for collecting or enforcing those
15    liabilities.
16    (f) If the domesticating entity is a qualified foreign
17entity, the certificate of authority or other foreign
18qualification of the domesticating entity is canceled when the
19domestication becomes effective.
20    (g) A domestication does not require the entity to wind up
21its affairs and does not constitute or cause the dissolution of
22the entity.
23(Source: P.A. 100-561, eff. 7-1-18.)
 
24    Section 99. Effective date. This Act takes effect July 1,
252019.