99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB4361

 

Introduced , by Rep. Elaine Nekritz

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Limited Liability Company Act. Establishes distinctions between membership interests. Provides for the appointment of officers. Authorizes the use of oral operating agreements. Makes changes concerning electronic signatures. Makes changes regarding a member's right to information. Provides that members of limited liability company are not agents solely because of membership. Expands the scope of operating agreements. Makes changes concerning unauthorized distributions. Provides that creditors acquire only distributional rights. Requires judicial action for dissolution based upon illegality. Abolishes certain statutory buyout rights. Provides for domestication of foreign companies. Provides for conversion of business entities into other forms. Requires the filing of a post office address for service of process. Limits the ability of companies to transact business until an application is filed with the Secretary of State. Makes technical and other changes. Effective July 1, 2017.


LRB099 15485 KTG 39774 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4361LRB099 15485 KTG 39774 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 Limited Liability Company Act is amended by
5changing Sections 1-5, 1-30, 1-40, 5-5, 5-45, 5-47, 5-50, 10-1,
610-15, 13-5, 15-1, 15-3, 15-5, 15-7, 20-1, 20-5, 25-35, 30-5,
730-10, 30-20, 35-1, 35-3, 35-4, 35-7, 35-15, 35-20, 35-45,
835-55, 37-5, 37-10, 37-15, 37-20, 37-25, 37-30, 37-40, 50-1,
950-10, and 55-1, by changing the headings of Articles 30 and
1037, and by adding Sections 1-6, 1-46, 1-65, 13-15, 13-20,
1130-25, 35-37, 37-16, 37-17, 37-21, 37-31, 37-32, 37-33, 37-34,
1237-36, and 55-3 as follows:
 
13    (805 ILCS 180/1-5)
14    Sec. 1-5. Definitions. As used in this Act, unless the
15context otherwise requires:
16    "Anniversary" means that day every year exactly one or more
17years after: (i) the date the articles of organization filed
18under Section 5-5 of this Act were filed by the Office of the
19Secretary of State, in the case of a limited liability company;
20or (ii) the date the application for admission to transact
21business filed under Section 45-5 of this Act was filed by the
22Office of the Secretary of State, in the case of a foreign
23limited liability company.

 

 

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1    "Anniversary month" means the month in which the
2anniversary of the limited liability company occurs.
3    "Articles of organization" means the articles of
4organization filed by the Secretary of State for the purpose of
5forming a limited liability company as specified in Article 5
6and all amendments thereto, whether evidenced by articles of
7amendment, articles of merger, or a statement of correction
8affecting the articles.
9    "Assumed limited liability company name" means any limited
10liability company name other than the true limited liability
11company name, except that the identification by a limited
12liability company of its business with a trademark or service
13mark of which it is the owner or licensed user shall not
14constitute the use of an assumed name under this Act.
15    "Bankruptcy" means bankruptcy under the Federal Bankruptcy
16Code of 1978, Title 11, Chapter 7 of the United States Code, as
17amended from time to time, or any successor statute.
18    "Business" includes every trade, occupation, profession,
19and other lawful purpose, whether or not carried on for profit.
20    "Company" means a limited liability company.
21    "Contribution" means any cash, property, or services
22rendered, or other benefit, or a promissory note or other
23binding obligation to contribute cash or property, or to
24perform services, or provide any other benefit, that a person
25contributes to the limited liability company in that person's
26capacity as a member or in order to become a member.

 

 

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1    "Court" includes every court and judge having jurisdiction
2in a case.
3    "Debtor in bankruptcy" means a person who is the subject of
4an order for relief under Title 11 of the United States Code, a
5comparable order under a successor statute of general
6application, or a comparable order under federal, state, or
7foreign law governing insolvency.
8    "Distribution" means a transfer of money, property, or
9other benefit from a limited liability company to a member in
10the member's capacity as a member or to a transferee of the
11member's distributional interest.
12    "Distributional interest" means all of a member's right to
13receive interest in distributions of by the limited liability
14company's assets, but no other rights or interests of a member
15company.
16    "Entity" means a person other than an individual.
17    "Federal employer identification number" means either (i)
18the federal employer identification number assigned by the
19Internal Revenue Service to the limited liability company or
20foreign limited liability company or (ii) in the case of a
21limited liability company or foreign limited liability company
22not required to have a federal employer identification number,
23any other number that may be assigned by the Internal Revenue
24Service for purposes of identification.
25    "Foreign limited liability company" means an
26unincorporated entity organized under laws other than the laws

 

 

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1of this State that afford limited liability to its owners
2comparable to the liability under Section 10-10 and is not
3required to register to transact business under any law of this
4State other than this Act.
5    "Insolvent" means that a limited liability company is
6unable to pay its debts as they become due in the usual course
7of its business.
8    "Legal representative" means, without limitation, an
9executor, administrator, guardian, personal representative and
10agent, including an appointee under a power of attorney.
11    "Limited liability company" means a limited liability
12company organized under this Act.
13    "L3C" or "low-profit limited liability company" means a
14for-profit limited liability company which satisfies the
15requirements of Section 1-26 of this Act and does not have as a
16significant purpose the production of income or the
17appreciation of property.
18    "Manager" means a person, whether or not a member of a
19manager-managed company, who is vested with authority in an
20operating agreement as provided in under Section 15-1 13-5.
21    "Manager-managed company" means a limited liability
22company that vests authority in a manager or managers in an
23operating agreement as provided in Section 15-1 which is so
24designated in its articles of organization.
25    "Member" means a person who becomes a member of the limited
26liability company upon formation of the company or in the

 

 

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1manner and at the time provided in the operating agreement or,
2if the operating agreement does not so provide, in the manner
3and at the time provided in this Act.
4    "Member-managed company" means a limited liability company
5other than a manager-managed company.
6    "Membership interest" means all of a member's rights in the
7limited liability company, including the member's right to
8receive distributions of the limited liability company's
9assets.
10    "Operating agreement" means the agreement under Section
1115-5, whether or not referred to as an operating agreement and
12whether oral, in a record, implied, or in any combination
13thereof, of all of the members of a limited liability company,
14including a sole member, concerning the relations among the
15members, managers, and limited liability company. The term
16"operating agreement" includes amendments to the agreement.
17    "Organizer" means one of the signers of the original
18articles of organization.
19    "Person" means an individual, partnership, domestic or
20foreign limited partnership, limited liability company or
21foreign limited liability company, trust, estate, association,
22corporation, governmental body, or other juridical being.
23    "Record" means information that is inscribed on a tangible
24medium or that is stored in an electronic or other medium and
25is retrievable in perceivable form.
26    "Registered office" means that office maintained by the

 

 

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1limited liability company in this State, the address, including
2street, number, city and county, of which is on file in the
3office of the Secretary of State, at which, any process,
4notice, or demand required or permitted by law may be served
5upon the registered agent of the limited liability company.
6    "Registered agent" means a person who is an agent for
7service of process on the limited liability company who is
8appointed by the limited liability company and whose address is
9the registered office of the limited liability company.
10    "Restated articles of organization" means the articles of
11organization restated as provided in Section 5-30.
12    "Sign" means, with the present intent to authenticate or
13adopt a record:
14        (1) to execute or adopt a tangible symbol; or
15        (2) to attach to or logically associate with the record
16    an electronic symbol, sound, or process.
17    "State" means a state, territory, or possession of the
18United States, the District of Columbia, or the Commonwealth of
19Puerto Rico.
20    "Transfer" includes an assignment, conveyance, deed, bill
21of sale, lease, mortgage, security interest, encumbrance, and
22gift.
23(Source: P.A. 96-126, eff. 1-1-10; 97-839, eff. 7-20-12.)
 
24    (805 ILCS 180/1-6 new)
25    Sec. 1-6. Electronic records. Any requirement in this Act

 

 

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1that there be a writing or that any document, instrument, or
2agreement be written or in ink is subject to the provisions of
3the Electronic Commerce Security Act.
 
4    (805 ILCS 180/1-30)
5    Sec. 1-30. Powers. Each limited liability company
6organized and existing under this Act may do all of the
7following:
8    (1) Sue and be sued, complain and defend, and participate
9in administrative or other proceedings, in its name.
10    (2) Have a seal, which may be altered at pleasure, and use
11the same by causing it, or a facsimile thereof, to be impressed
12or affixed or in any other manner reproduced, provided that the
13affixing of a seal to an instrument shall not give the
14instrument additional force or effect, or change the
15construction thereof, and the use of a seal is not mandatory.
16    (3) Purchase, take, receive, lease as lessee, take by gift,
17legacy, or otherwise acquire, own, hold, use, and otherwise
18deal in and with any real or personal property, or any interest
19therein, wherever situated.
20    (4) Sell, convey, mortgage, pledge, lease as lessor, and
21otherwise dispose of all or any part of its property and
22assets.
23    (5) Lend money to and otherwise assist its members and
24employees.
25    (6) Purchase, take, receive, subscribe for or otherwise

 

 

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1acquire, own, hold, vote, use, employ, sell, mortgage, loan,
2pledge, or otherwise dispose of, and otherwise use and deal in
3and with, shares or other interests in or obligations of other
4limited liability companies, domestic or foreign corporations,
5associations, general or limited partnerships, or individuals.
6    (7) Incur liabilities, borrow money for its proper purposes
7at any rate of interest the limited liability company may
8determine without regard to the restrictions of any usury law
9of this State, issue notes, bonds, and other obligations,
10secure any of its obligations by mortgage or pledge or deed of
11trust of all or any part of its property, franchises, and
12income, and make contracts, including contracts of guaranty and
13suretyship.
14    (8) Invest its surplus funds from time to time, lend money
15for its proper purposes, and take and hold real and personal
16property as security for the payment of funds so loaned or
17invested.
18    (9) Conduct its business, carry on its operations, have
19offices within and without this State, and exercise in any
20other state, territory, district, or possession of the United
21States or in any foreign country the powers granted by this
22Act.
23    (10) Designate Elect managers and appoint officers and
24other agents of the limited liability company, define their
25duties, and fix their compensation.
26    (11) Enter into or amend an operating agreement, not

 

 

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1inconsistent with the laws of this State, for the
2administration and regulation of the affairs of the limited
3liability company.
4    (12) Make donations for the public welfare or for
5charitable, scientific, religious, or educational purposes,
6lend money to the government, and transact any lawful business
7in aid of the United States.
8    (13) Establish deferred compensation plans, pension plans,
9profit-sharing plans, bonus plans, option plans, and other
10incentive plans for its managers and employees and make the
11payments provided for therein.
12    (14) Become a promoter, partner, member, associate, or
13manager of any general partnership, limited partnership, joint
14venture or similar association, any other limited liability
15company, or other enterprise.
16    (15) Have and exercise all powers necessary or convenient
17to effect any or all of the purposes for which the limited
18liability company is organized.
19(Source: P.A. 90-424, eff. 1-1-98.)
 
20    (805 ILCS 180/1-40)
21    Sec. 1-40. Records to be kept.
22    (a) Each limited liability company shall keep at the
23principal place of business of the company named in the
24articles of organization or other reasonable locations
25specified in the operating agreement all of the following:

 

 

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1        (1) A list of the full name and last known address of
2    each member setting forth the amount of cash each member
3    has contributed, a description and statement of the agreed
4    value of the other property or services each member has
5    contributed or has agreed to contribute in the future, and
6    the date on which each became a member.
7        (2) A copy of the articles of organization, as amended
8    or restated, together with executed copies of any powers of
9    attorney under which any articles, application, or
10    certificate has been executed.
11        (3) Copies of the limited liability company's federal,
12    State, and local income tax returns and reports, if any,
13    for the 3 most recent years.
14        (4) Copies of any then effective written operating
15    agreement and any amendments thereto and of any financial
16    statements of the limited liability company for the 3 most
17    recent years.
18    (b) Records kept under this Section may be inspected and
19copied at the request and expense of any member or legal
20representative of a deceased member or member under legal
21disability during ordinary business hours.
22    (c) The rights under subsection (b) of this Section also
23extend to a transferee of a distributional interest, but only
24for a proper purpose. In order to exercise this right, a
25transferee must make written demand upon the limited liability
26company, stating with particularity the records sought to be

 

 

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1inspected and the purpose of the demand.
2    (d) Within 10 days after receiving a demand pursuant to
3subsection (c):
4        (1) the company shall provide the information demanded
5    or, in a record, a description of the information the
6    company will provide, stating a reasonable time within
7    which it will be provided and the place where it will be
8    provided; and
9        (2) if the company declines to provide any demanded
10    information, the company shall state its reasons for
11    declining to the transferee in a record.
12    A transferee may exercise the rights under this subsection
13through a legal representative.
14(Source: P.A. 90-424, eff. 1-1-98.)
 
15    (805 ILCS 180/1-46 new)
16    Sec. 1-46. Applicability of statute of frauds. An operating
17agreement is enforceable whether or not there is a writing
18signed or record authenticated by a party against whom
19enforcement is sought, even if the agreement is not capable of
20performance within one year of its making.
 
21    (805 ILCS 180/1-65 new)
22    Sec. 1-65. Governing law. The law of this State governs:
23        (1) the internal affairs and organization of a limited
24    liability company;

 

 

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1        (2) the liability of a member as member and a manager
2    as manager for the debts, obligations, or other liabilities
3    of a limited liability company;
4        (3) the internal affairs and establishment of a series
5    of a limited liability company;
6        (4) the liability of a member or a manager associated
7    with a series for the debts, obligations, or other
8    liabilities of the series; and
9        (5) the liability of a series for the debts,
10    obligations, or other liabilities of the limited liability
11    company that established the series or for another series
12    established by the limited liability company, and the
13    liability of the limited liability company for the debts,
14    obligations, or other liabilities of a series established
15    by the limited liability company.
 
16    (805 ILCS 180/5-5)
17    Sec. 5-5. Articles of organization.
18    (a) The articles of organization shall set forth all of the
19following:
20        (1) The name of the limited liability company and the
21    address of its principal place of business which may, but
22    need not be a place of business in this State.
23        (2) The purposes for which the limited liability
24    company is organized, which may be stated to be, or to
25    include, the transaction of any or all lawful businesses

 

 

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1    for which limited liability companies may be organized
2    under this Act.
3        (3) The name of its registered agent and the address of
4    its registered office.
5        (4) A confirmation that If the limited liability
6    company complies with the requirement in subsection (b) of
7    Section 5-1 that the company has one or more members at the
8    time of filing or, if the filing is to be effective on a
9    later date, that the company will have one or more members
10    on the date the filing is to be effective is to be managed
11    by a manager or managers, the names and business addresses
12    of the initial manager or managers.
13        (5) The name and business address of all of the
14    managers and any member having the authority of a manager
15    If management of the limited liability company is to be
16    vested in the members under Section 15-1, then the names
17    and addresses of the initial member or members.
18        (5.5) The duration of the limited liability company,
19    which shall be perpetual unless otherwise stated.
20        (6) (Blank).
21        (7) The name and address of each organizer.
22        (8) Any other provision, not inconsistent with law,
23    that the members elect to set out in the articles of
24    organization for the regulation of the internal affairs of
25    the limited liability company, including any provisions
26    that, under this Act, are required or permitted to be set

 

 

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1    out in the operating agreement of the limited liability
2    company.
3    (b) A limited liability company is organized at the time
4articles of organization are filed by the Secretary of State or
5at any later time, not more than 60 days after the filing of
6the articles of organization, specified in the articles of
7organization.
8    (c) Articles of organization for the organization of a
9limited liability company for the purpose of accepting and
10executing trusts shall not be filed by the Secretary of State
11until there is delivered to him or her a statement executed by
12the Secretary of Financial and Professional Regulation or
13successor State board, department, or agency having
14jurisdiction over the regulation of trust companies that the
15organizers of the limited liability company have made
16arrangements with the Secretary of Financial and Professional
17Regulation or successor State board, department, or agency
18having jurisdiction over the regulation of trust companies to
19comply with the Corporate Fiduciary Act.
20    (d) Articles of organization for the organization of a
21limited liability company as a bank or a savings bank must be
22filed with the Secretary Department of Financial and
23Professional Regulation or successor State board, department,
24or agency having jurisdiction over the regulation of banks or
25savings banks or, if the bank or savings bank will be organized
26under federal law, with the appropriate federal banking

 

 

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1regulator.
2(Source: P.A. 98-171, eff. 8-5-13; 99-227, eff. 8-3-15.)
 
3    (805 ILCS 180/5-45)
4    Sec. 5-45. Forms, execution, acknowledgement and filing.
5    (a) All reports required by this Act to be filed in the
6Office of the Secretary of State shall be made on forms
7prescribed and furnished by the Secretary of State. Forms for
8all other documents to be filed in the Office of the Secretary
9of State shall be furnished by the Secretary of State upon
10request therefor, but the use thereof, unless otherwise
11specifically prescribed in this Act, shall not be mandatory.
12    (b) Whenever any provision of this Act specifically
13requires any document to be executed by the limited liability
14company in accordance with this Section, unless otherwise
15specifically stated in this Act and subject to any additional
16provisions of this Act, the document shall be signed executed,
17in ink, as follows:
18        (1) The initial articles of organization shall be
19    signed by the organizer or organizers.
20        (2) A document filed on behalf of a dissolved limited
21    liability company that has no members must be signed by the
22    person winding up the company's activities under Section
23    35-4.
24        (3) Any other document must be signed by a person
25    authorized by the limited liability company to sign it. All

 

 

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1    other documents shall be signed:
2            (A) by a manager and verified by him or her; or
3            (B) if there are no managers, then by the members
4        or those of them that may be designated by a majority
5        vote of the members.
6    (c) The name of a person signing the document and the
7capacity in which the person signs shall be stated beneath or
8opposite the person's signature.
9    (d) The execution of any document required by this Act by a
10person member or manager constitutes an affirmation under the
11penalties of perjury that the facts stated therein are true and
12that the person has authority to execute the document.
13    (e) When filed in the Office of the Secretary of State, an
14authorization, including a power of attorney, to sign a record
15must be in writing, then sworn to, verified, or acknowledged.
16(Source: P.A. 90-424, eff. 1-1-98.)
 
17    (805 ILCS 180/5-47)
18    Sec. 5-47. Statement of correction.
19    (a) Whenever any instrument authorized to be filed with the
20Secretary of State under any provision of this Act has been so
21filed and, as of the date of the action therein referred to,
22contains any misstatement of fact, typographical error, error
23of transcription, or any other error or defect or was
24defectively or erroneously executed, such instrument may be
25corrected by filing, in accordance with Section 5-45 of this

 

 

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1Act, a statement of correction.
2    (b) A statement of correction shall set forth:
3        (1) The name of the limited liability company and the
4    state or country under the laws of which it is organized.
5        (2) The title of the instrument being corrected and the
6    date it was filed by the Secretary of State.
7        (3) The inaccuracy, error, or defect to be corrected
8    and the portion of the instrument in corrected form.
9    (c) A statement of correction shall be executed in the same
10manner in which the instrument being corrected was required to
11be executed.
12    (d) The corrected instrument shall be effective as of the
13date the original instrument was filed.
14    (e) A statement of correction shall not:
15        (1) Effect any change or amendment of articles which
16    would not in all respects have complied with the
17    requirements of this Act at the time of filing the
18    instrument being corrected.
19        (2) Take the place of any document, statement, or
20    report otherwise required to be filed by this Act.
21        (3) Affect any right or liability accrued or incurred
22    before such filing, except that any right or liability
23    accrued or incurred by reason of the error or defect being
24    corrected shall be extinguished by such filing if the
25    person having such right has not detrimentally relied on
26    the original instrument.

 

 

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1        (4) (Blank). Alter the provisions of the articles of
2    organization with respect to the limited liability company
3    name, purpose, ability to establish series, or the names
4    and addresses of the organizers, initial manager or
5    managers, and initial member or members.
6        (5) (Blank). Alter the provisions of the application
7    for admission to transact business as a foreign limited
8    liability company with respect to the limited liability
9    name or ability to establish series.
10        (6) (Blank). Alter the provisions of the application to
11    adopt or change an assumed limited liability company name
12    with respect to the assumed limited liability company name.
13        (7) Alter the wording of any resolution as filed in any
14    document with the Secretary of State and which was in fact
15    adopted by the members or managers.
16(Source: P.A. 95-368, eff. 8-23-07.)
 
17    (805 ILCS 180/5-50)
18    Sec. 5-50. Amendment or termination dissolution by
19judicial act. If a person required by Section 5-45 to execute
20an amendment or statement articles of termination dissolution
21fails or refuses to do so, any other member and any transferee
22of a limited liability company interest, who is adversely
23affected by the failure or refusal, may petition a court to
24direct the amendment or statement of termination dissolution.
25If the court finds that the amendment or statement of

 

 

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1termination dissolution is proper and that any person so
2designated has failed or refused to execute the amendment or
3statement articles of termination dissolution, it shall order
4the Secretary of State to record an appropriate amendment or
5statement of termination dissolution.
6(Source: P.A. 90-424, eff. 1-1-98.)
 
7    (805 ILCS 180/10-1)
8    Sec. 10-1. Admission of members.
9    (a) A person becomes a member of a limited liability
10company:
11        (1) upon formation of the company, as provided in an
12    agreement between the organizer and the initial member if
13    there is only one member, or as provided in an agreement
14    among initial members if there is more than one member;
15        (2) after the formation of the company,
16            (A) as provided in the operating agreement;
17            (B) as the result of a transaction effective under
18        Article 37;
19            (C) with the consent of all the members; or
20            (D) if, within 180 consecutive days after the
21        company ceases to have any members:
22                (i) the last person to have been a member, or
23            the legal representative of that person,
24            designates a person to become a member; and
25                (ii) the designated person consents to become

 

 

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1            a member.
2    (b) A person that acquires a distributional interest, but
3that does not become a member, has merely the rights of a
4transferee under Sections 30-5 and 30-10.
5    (c) A person may become a member without acquiring a
6distributional interest and without making or being obligated
7to make a contribution to the limited liability company. After
8the filing of the articles of organization, a person who
9acquires a membership interest directly from the limited
10liability company or is a transferee of a membership interest
11may be admitted as a member with unanimous consent of the
12members.
13(Source: P.A. 90-424, eff. 1-1-98.)
 
14    (805 ILCS 180/10-15)
15    Sec. 10-15. Right of members and dissociated members
16Member's right to information.
17    (a) A company shall furnish information when any member
18demands it in a record concerning the company's activities,
19financial condition, and other circumstances of the company's
20business necessary to the proper exercise of a member's rights
21and duties under the operating agreement or this Act or that is
22otherwise material to the membership interest of a member,
23unless the company knows that the member already knows that
24information.
25    (b) The following rules apply when a member makes a demand

 

 

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1for information under this Section:
2        (1) During regular business hours and at a reasonable
3    location and time specified by the company, a member may
4    obtain from the company, inspect, and copy information for
5    a purpose consistent with subsection (a).
6        (2) Within 10 days after receiving a demand pursuant to
7    subsection (a):
8            (A) the company shall provide the information
9        demanded or, in a record, a description of the
10        information the company will provide, stating a
11        reasonable time within which it will be provided and
12        the place where it will be provided; and
13            (B) if the company declines to provide any demanded
14        information, the company shall state its reasons for
15        declining to the member in a record.
16    (c) Whenever this Act or an operating agreement provides
17for a member to give or withhold consent to a matter, before
18the consent is given or withheld, the company shall, without
19demand, provide the member with all information that is known
20to the company that is material to the member's decision.
21    (d) Within 10 days after a demand made in a record received
22by the limited liability company, a dissociated member may have
23access to information to which the person was entitled while a
24member if the information pertains to the period during which
25the person was a member, and the person seeks the information
26in good faith for a purpose consistent with subsection (a). The

 

 

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1company shall respond to a demand made pursuant to this
2subsection in the manner provided in subdivisions (A) and (B)
3of paragraph (2) of subsection (b).
4    (e) A limited liability company may charge a person that
5makes a demand under this Section the reasonable costs of
6copying, limited to the costs of labor and material.
7    (f) A member or dissociated member may exercise rights
8under this Section through an agent or, in the case of an
9individual under legal disability, a legal representative. Any
10restriction or condition imposed by the operating agreement or
11under subsection (h) applies both to the agent or legal
12representative and the member or dissociated member.
13    (g) The rights under this Section do not extend to a person
14as transferee.
15    (h) In addition to any restriction or condition stated in
16its operating agreement, the limited liability company, as a
17matter within the ordinary course of its activities, may impose
18reasonable restrictions and conditions on access to and use of
19information to be furnished under this Section including, but
20not limited to, the designation of information such as trade
21secrets or information subject to confidentiality agreements
22with third parties as confidential with appropriate
23nondisclosure and safeguarding obligations. In a dispute
24concerning the reasonableness of a restriction or designation
25under this subsection, the company has the burden of proving
26reasonableness.

 

 

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1    (i) This Section does not limit or restrict the right to
2inspect and copy records as provided in subsection (b) of
3Section 1-40. (a) A limited liability company shall provide
4members and their agents and attorneys access to its records,
5including the records required to be kept under Section 1-40,
6at the company's principal place of business or other
7reasonable locations specified in the operating agreement. The
8company shall provide former members and their agents and
9attorneys access for proper purposes to records pertaining to
10the period during which they were members. The right of access
11provides the opportunity to inspect and copy records during
12ordinary business hours. The company may impose a reasonable
13charge, limited to the costs of labor and material, for copies
14of records furnished.
15    (b) A member has the right upon written demand given to the
16limited liability company to obtain at the company's expense a
17copy of any written operating agreement.
18(Source: P.A. 90-424, eff. 1-1-98.)
 
19    (805 ILCS 180/13-5)
20    Sec. 13-5. No agency power of a member as member. Agency of
21members and managers.
22    (a) A member is not an agent of a limited liability company
23solely by reason of being a member. Subject to subsections (b)
24and (c):
25    (b) Nothing herein shall be deemed to limit the effect of

 

 

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1law other than this Act, including the law of agency.
2    (c) A person's status as a member does not prevent or
3restrict law other than this Act from imposing liability on a
4limited liability company because of the person's conduct.
5        (1) Each member is an agent of the limited liability
6    company for the purpose of its business, and an act of a
7    member, including the signing of an instrument in the
8    company's name, for apparently carrying on, in the ordinary
9    course, the company's business or business of the kind
10    carried on by the company binds the company, unless the
11    member had no authority to act for the company in the
12    particular matter and the person with whom the member was
13    dealing knew or had notice that the member lacked
14    authority.
15        (2) An act of a member that is not apparently for
16    carrying on, in the ordinary course, the company's business
17    or business of the kind carried on by the company binds the
18    company only if the act was authorized by the other
19    members.
20    (b) Subject to subsection (c), in a manager-managed
21company:
22        (1) A member is not an agent of the company for the
23    purpose of its business solely by reason of being a member.
24    Each manager is an agent of the company for the purpose of
25    its business, and an act of a manager, including the
26    signing of an instrument in the company's name, for

 

 

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1    apparently carrying on, in the ordinary course, the
2    company's business or business of the kind carried on by
3    the company binds the company, unless the manager had no
4    authority to act for the company in the particular matter
5    and the person with whom the manager was dealing knew or
6    had notice that the manager lacked authority.
7        (2) An act of a manager which is not apparently for
8    carrying on, in the ordinary course, the company's business
9    or business of the kind carried on by the company binds the
10    company only if the act was authorized under Section 15-1.
11    (c) Unless the articles of organization limit their
12authority, any member of a member-managed company or manager of
13a manager-managed company may sign and deliver any instrument
14transferring or affecting the company's interest in real
15property. The instrument is conclusive in favor of a person who
16gives value without knowledge of the lack of the authority of
17the person signing and delivering the instrument.
18(Source: P.A. 90-424, eff. 1-1-98.)
 
19    (805 ILCS 180/13-15 new)
20    Sec. 13-15. Statement of authority.
21    (a) A limited liability company may deliver to the
22Secretary of State for filing a statement of authority. The
23statement:
24        (1) must include the name of the company and the
25    address of its principal place of business; and

 

 

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1        (2) may state the authority, or limitations on the
2    authority, of any member or manager of the company or any
3    other person to:
4            (A) execute an instrument transferring real
5        property held in the name of the company; or
6            (B) enter into other transactions on behalf of, or
7        otherwise act for or bind, the company.
8    (b) To amend or cancel a statement of authority, a limited
9liability company must deliver to the Secretary of State for
10filing a statement of amendment or cancellation. The statement
11must include:
12        (1) the name of the limited liability company and the
13    address of its principal place of business;
14        (2) the date the statement of authority being amended
15    or cancelled became effective; and
16        (3) the contents of the amendment or a declaration that
17    the statement of authority is canceled.
18    (c) Except as otherwise provided in subsections (e) and
19(f), a limitation on the authority of a member or manager of
20the limited liability company contained in a statement of
21authority is not by itself evidence of knowledge or notice of
22the limitation by any person.
23    (d) A grant of authority not pertaining to transfers of
24real property and contained in a statement of authority is
25conclusive in favor of a person that is not a member and that
26gives value in reliance on the grant, except to the extent that

 

 

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1when the person gives value, the person has knowledge to the
2contrary.
3    (e) A certified copy of a statement of authority that
4grants authority to transfer real property held in the name of
5the limited liability company and that is recorded in the
6office for recording transfers of the real property is
7conclusive in favor of a person that is not a member and that
8gives value in reliance on the grant without knowledge to the
9contrary.
10    (f) If a certified copy of a statement of authority
11containing a limitation on the authority to transfer real
12property held in the name of a limited liability company is
13recorded in the office for recording transfers of that real
14property, all persons that are not members are deemed to know
15of the limitation.
16    (g) Unless previously cancelled by a statement of
17cancellation, a statement of authority expires as of the date,
18if any, specified in the statement of authority.
19    (h) If the articles of organization state the authority or
20limitations on the authority of any person on behalf of a
21company, the authority stated or limited shall not bind any
22person who is not a member or manager until that person
23receives actual notice in a record from the company that agency
24authority is stated or limited in the articles. If the
25authority stated or limited in the articles of organization
26conflicts with authority stated or limited in a statement of

 

 

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1authority filed with the Secretary of State under this Section
2on behalf of the company, the statement of authority is the
3effective statement and a person who is not a member or manager
4may rely upon the terms of the filed statement of authority
5notwithstanding conflicting terms in the articles of
6organization.
 
7    (805 ILCS 180/13-20 new)
8    Sec. 13-20. Statement of denial. A person named in a filed
9statement of authority granting that person authority may
10deliver to the Secretary of State for filing a statement of
11denial that:
12        (1) provides the name of the limited liability company
13    and the caption of the statement of authority to which the
14    statement of denial pertains; and
15        (2) denies the grant of authority.
16    An effective statement of denial operates as a restrictive
17amendment under subsection (b) of Section 13-15 and, if a
18certified copy thereof is recorded in the office for recording
19transfers of real property in which a prior statement of
20authority has been recorded as provided in subsection (e) of
21Section 13-15, the statement of denial shall be deemed a
22limitation on the statement of authority for purposes of
23subsection (f) of Section 13-15.
 
24    (805 ILCS 180/15-1)

 

 

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1    Sec. 15-1. Management of limited liability company.
2    (a) A limited liability company is a member-managed limited
3liability company unless the operating agreement:
4        (1) expressly provides that:
5            (A) the company is or will be manager-managed;
6            (B) the company is or will be managed by managers;
7        or
8            (C) management of the company is or will be vested
9        in managers; or
10        (2) includes words of similar import.
11    (b) (a) In a member-managed company:
12        (1) each member has equal rights in the management and
13    conduct of the company's business; and
14        (2) except as otherwise provided in subsection (d) (c)
15    of this Section, any matter relating to the business of the
16    company may be decided by a majority of the members.
17    (c) (b) In a manager-managed company:
18        (1) each manager has equal rights in the management and
19    conduct of the company's business;
20        (2) except as otherwise provided in subsection (d) (c)
21    of this Section, any matter relating to the business of the
22    company may be exclusively decided by the manager or, if
23    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,

 

 

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1        removed, or replaced by a vote, approval, or consent of
2        a majority of the members; and
3            (B) holds office until a successor has been elected
4        and qualified, unless the manager sooner resigns or is
5        removed.
6    (d) (c) The only matters of a member or manager-managed
7company's business requiring the consent of all of the members
8are the following:
9        (1) the amendment of the operating agreement under
10    Section 15-5;
11        (2) an amendment to the articles of organization under
12    Article 5;
13        (3) the compromise of an obligation to make a
14    contribution under Section 20-5;
15        (4) the compromise, as among members, of an obligation
16    of a member to make a contribution or return money or other
17    property paid or distributed in violation of this Act;
18        (5) the making of interim distributions under
19    subsection (a) of Section 25-1, including the redemption of
20    an interest;
21        (6) the admission of a new member;
22        (7) the use of the company's property to redeem an
23    interest subject to a charging order;
24        (8) the consent to dissolve the company under
25    subdivision (2) of subsection (a) of Section 35-1;
26        (9) a waiver of the right to have the company's

 

 

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1    business wound up and the company terminated under Section
2    35-3;
3        (9) (10) the consent of members to convert, merge with
4    another entity or domesticate under Article 37 under
5    Section 37-20; and
6        (10) (11) the sale, lease, exchange, or other disposal
7    of all, or substantially all, of the company's property
8    with or without goodwill.
9    (e) (d) Action requiring the consent of members or managers
10under this Act may be taken without a meeting.
11    (f) (e) A member or manager may appoint a proxy to vote or
12otherwise act for the member or manager by signing an
13appointment instrument, either personally or by the member or
14manager's attorney-in-fact.
15(Source: P.A. 90-424, eff. 1-1-98.)
 
16    (805 ILCS 180/15-3)
17    Sec. 15-3. General standards of member and manager's
18conduct.
19    (a) The fiduciary duties a member owes to a member-managed
20company and its other members include the duty of loyalty and
21the duty of care referred to in subsections (b) and (c) of this
22Section.
23    (b) A member's duty of loyalty to a member-managed company
24and its other members includes the following:
25        (1) to account to the company and to hold as trustee

 

 

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1    for it any property, profit, or benefit derived by the
2    member in the conduct or winding up of the company's
3    business or derived from a use by the member of the
4    company's property, including the appropriation of a
5    company's opportunity;
6        (2) to act fairly when a member deals with the company
7    in the conduct or winding up of the company's business as
8    or on behalf of a party having an interest adverse to the
9    company; and
10        (3) to refrain from competing with the company in the
11    conduct of the company's business before the dissolution of
12    the company.
13    (c) A member's duty of care to a member-managed company and
14its other members in the conduct of and winding up of the
15company's business is limited to refraining from engaging in
16grossly negligent or reckless conduct, intentional misconduct,
17or a knowing violation of law.
18    (d) A member shall discharge his or her duties to a
19member-managed company and its other members under this Act or
20under the operating agreement and exercise any rights
21consistent with the obligation of good faith and fair dealing.
22    (e) A member of a member-managed company does not violate a
23duty or obligation under this Act or under the operating
24agreement merely because the member's conduct furthers the
25member's own interest.
26    (f) This Section applies to a person winding up the limited

 

 

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1liability company's business as the personal or legal
2representative of the last surviving member as if the person
3were a member.
4    (g) In a manager-managed company:
5        (1) a member who is not also a manager owes no duties
6    to the company or to the other members solely by reason of
7    being a member;
8        (2) a manager is held to the same standards of conduct
9    prescribed for members in subsections (b), (c), (d), and
10    (e) of this Section;
11        (3) a member who exercises some or all of the authority
12    of a manager and conduct of the company's business is held
13    to the standards of conduct in subsections (b), (c), (d),
14    and (e) of this Section to the extent that the member
15    exercises the managerial authority vested in a manager by
16    this Act; and
17        (4) a manager is relieved of liability imposed by law
18    for violations of the standards prescribed by subsections
19    (b), (c), (d), and (e) to the extent of the managerial
20    authority delegated to the members by the operating
21    agreement.
22(Source: P.A. 95-331, eff. 8-21-07; 96-263, eff. 1-1-10.)
 
23    (805 ILCS 180/15-5)
24    Sec. 15-5. Operating agreement.
25    (a) All members of a limited liability company may enter

 

 

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1into an operating agreement to regulate the affairs of the
2company and the conduct of its business and to govern relations
3among the members, managers, and company. The operating
4agreement may establish that a limited liability company is a
5manager-managed limited liability company and the rights and
6duties under this Act of a person in the capacity of a manager.
7To the extent the operating agreement does not otherwise
8provide, this Act governs relations among the members,
9managers, and company. Except as provided in subsections
10subsection (b), (c), (d), and (e) of this Section, an operating
11agreement may modify any provision or provisions of this Act
12governing relations among the members, managers, and company.
13    (b) The operating agreement may not:
14        (1) unreasonably restrict a right to information or
15    access to records under Section 1-40 or Section 10-15;
16        (2) vary the right to expel a member in an event
17    specified in subdivision (6) of Section 35-45;
18        (3) vary the requirement to wind up the limited
19    liability company's business in a case specified in
20    subdivision subdivisions (3) or (4), (5), or (6) of
21    subsection (a) of Section 35-1;
22        (4) restrict rights of a person, other than a manager,
23    member, and transferee of a member's distributional
24    interest, under this Act;
25        (5) restrict the power of a member to dissociate under
26    Section 35-50, although an operating agreement may

 

 

HB4361- 35 -LRB099 15485 KTG 39774 b

1    determine whether a dissociation is wrongful under Section
2    35-50, and it may eliminate or vary the obligation of the
3    limited liability company to purchase the dissociated
4    member's distributional interest under Section 35-60;
5        (6) (blank); eliminate or reduce a member's fiduciary
6    duties, but may;
7            (A) identify specific types or categories of
8        activities that do not violate these duties, if not
9        manifestly unreasonable; and
10            (B) specify the number or percentage of members or
11        disinterested managers that may authorize or ratify,
12        after full disclosure of all materials facts, a
13        specific act or transaction that otherwise would
14        violate these duties;
15        (6.5) eliminate or reduce the obligations or purposes a
16    low-profit limited liability company undertakes when
17    organized under Section 1-26; or
18        (7) eliminate or reduce the obligation of good faith
19    and fair dealing under subsection (d) of Section 15-3, but
20    the operating agreement may determine the standards by
21    which the performance of the member's duties or the
22    exercise of the member's rights obligation is to be
23    measured; , if the standards are not manifestly
24    unreasonable.
25        (8) eliminate, vary, or restrict the priority of a
26    statement of authority over provisions in the articles of

 

 

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1    organization as provided in subsection (h) of Section
2    13-15;
3        (9) vary the law applicable under Section 1-65;
4        (10) vary the power of the court under Section 5-50; or
5        (11) restrict the right to approve a merger,
6    conversion, or domestication under Article 37 of a member
7    that will have personal liability with respect to a
8    surviving, converted, or domesticated organization.
9    (c) The operating agreement may:
10        (1) restrict or eliminate a fiduciary duty, other than
11    the duty of care described in subsection (c) of Section
12    15-3, but only to the extent the restriction or elimination
13    in the operating agreement is clear and unambiguous;
14        (2) identify specific types or categories of
15    activities that do not violate any fiduciary duty; and
16        (3) alter the duty of care, except to authorize
17    intentional misconduct or knowing violation of law.
18    (d) The operating agreement may specify the method by which
19a specific act or transaction that would otherwise violate the
20duty of loyalty may be authorized or ratified by one or more
21disinterested and independent persons after full disclosure of
22all material facts.
23    (e) The operating agreement may alter or eliminate the
24right to payment or reimbursement for a member or manager
25provided by Section 15-7 and may eliminate or limit a member or
26manager's liability to the limited liability company and

 

 

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1members for money damages, except for:
2        (1) subject to subsections (c) and (d) of this Section,
3    breach of the duties as required in subdivisions (1), (2),
4    and (3) of subsection (b) of Section 15-3 and subsection
5    (g) of Section 15-3;
6        (2) a financial benefit received by the member or
7    manager to which the member or manager is not entitled;
8        (3) a breach of a duty under Section 25-35;
9        (4) intentional infliction of harm on the company or a
10    member; or
11        (5) an intentional violation of criminal law.
12    (f) A limited liability company is bound by and may enforce
13the operating agreement, whether or not the company has itself
14manifested assent to the operating agreement.
15    (g) A person that becomes a member of a limited liability
16company is deemed to assent to the operating agreement.
17    (h) An operating agreement may be entered into before,
18after, or at the time of filing of articles of organization
19and, whether entered into before, after, or at the time of the
20filing, may be made effective as of the time of formation of
21the limited liability company or as of the time or date
22provided in the operating agreement.
23    (c) In a limited liability company with only one member,
24the operating agreement includes any of the following:
25        (1) Any writing, without regard to whether the writing
26    otherwise constitutes an agreement, as to the company's

 

 

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1    affairs signed by the sole member.
2        (2) Any written agreement between the member and the
3    company as to the company's affairs.
4        (3) Any agreement, which need not be in writing,
5    between the member and the company as to a company's
6    affairs, provided that the company is managed by a manager
7    who is a person other than the member.
8(Source: P.A. 96-126, eff. 1-1-10.)
 
9    (805 ILCS 180/15-7)
10    Sec. 15-7. Member and manager's right to payments and
11reimbursement and indemnification.
12    (a) A limited liability company shall reimburse a member or
13manager for payments made and indemnify a member or manager for
14debts, obligations, or other liabilities incurred by the member
15or manager in the ordinary course of the member's or manager's
16activities on behalf of the company, if, in making the payment
17or incurring the debt, obligation, or other liability, the
18member or manager complied with the duties stated in Sections
1915-3 and 25-35 business of the company or for the preservation
20of its business or property.
21    (b) A limited liability company shall reimburse a member
22for an advance to the company beyond the amount of contribution
23the member agreed to make.
24    (c) A payment or advance made by a member that gives rise
25to an obligation of a limited liability company under

 

 

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1subsection (a) or (b) of this Section constitutes a loan to the
2company upon which interest accrues from the date of the
3payment or advance.
4    (d) A member is not entitled to remuneration for services
5performed for a limited liability company, except for
6reasonable compensation for services rendered in winding up the
7business of the company.
8    (e) A limited liability company may purchase and maintain
9insurance on behalf of a member or manager of the company
10against liability asserted against or incurred by the member or
11manager in that capacity or arising from that status even if,
12under subsection (e) of Section 15-5, the operating agreement
13could not eliminate or limit the person's liability to the
14company for the conduct giving rise to the liability.
15(Source: P.A. 90-424, eff. 1-1-98.)
 
16    (805 ILCS 180/20-1)
17    Sec. 20-1. Form of contribution. The contribution of a
18member may be in cash, property, services rendered, or other
19benefit, or a promissory note or other obligation to contribute
20cash or property or to perform services.
21(Source: P.A. 87-1062.)
 
22    (805 ILCS 180/20-5)
23    Sec. 20-5. Member's liability for contributions.
24    (a) (Blank).

 

 

HB4361- 40 -LRB099 15485 KTG 39774 b

1    (b) (Blank).
2    (c) A member's obligation to contribute money, property, or
3other benefit to, or to perform services for, a limited
4liability company is not excused by the member's death,
5disability, dissolution, or any other reason inability to
6perform personally. If a member does not make the required
7contribution of property or services, the member is obligated
8at the option of the company to contribute money equal to the
9value of that portion of the required stated contribution which
10has not been made. The foregoing option does not limit the
11availability of any remedy provided for in the operating
12agreement or under law, including specific performance.
13    (d) A creditor of a limited liability company who extends
14credit or otherwise acts in reliance on an obligation described
15in subsection (c), and without notice of any compromise under
16subdivision (4) of subsection (d) (c) of Section 15-1, may
17enforce the original obligation.
18    (e) Subject to Sections 1-43 and 15-5, the operating
19agreement may provide that the interest of any member that
20fails to make any contribution that the member is required to
21make will be subject to specified remedies for, or specified
22consequences of, the failure. The specified remedies or
23consequences may include, without limitation:
24        (1) Loss of voting, approval, or other rights.
25        (2) Loss of the member's ability to participate in the
26    management or operations of the limited liability company.

 

 

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1        (3) Liquidated damages.
2        (4) Diluting, reducing, or eliminating the defaulting
3    member's proportionate interest in the company.
4        (5) Subordinating the defaulting member's right to
5    receive distributions to that of the nondefaulting
6    members.
7        (6) Permitting the forced sale of the defaulting
8    member's interest in the company.
9        (7) Permitting one or more nondefaulting members to
10    lend the amount necessary to meet the defaulting member's
11    commitment.
12        (8) Adjusting the interest rates or other rates of
13    return, preferred, priority or otherwise, with respect to
14    contributions by or capital accounts of the nondefaulting
15    members.
16        (9) Fixing the value of the defaulting member's
17    interest by appraisal or formula and the redemption or sale
18    of the defaulting member's interest at that value.
19(Source: P.A. 90-424, eff. 1-1-98.)
 
20    (805 ILCS 180/25-35)
21    Sec. 25-35. Liability for unlawful distributions.
22    (a) Except as otherwise provided in subsections (b) and
23(c), if a A member of a member-managed company or a member or
24manager of a manager-managed company consents who votes for or
25assents to a distribution made in violation of Section 25-30,

 

 

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1the articles of organization, or the operating agreement and in
2consenting to the distribution fails to comply with Section
315-3, the member or manager is personally liable to the company
4for the amount of the distribution that exceeds the amount that
5could have been distributed without violating Section 25-30,
6the articles of organization, or the operating agreement if it
7is established that the member or manager did not perform the
8member or manager's duties in compliance with Section 15-3.
9    (b) To the extent the operating agreement of a limited
10liability company expressly relieves a member of the authority
11and responsibility to consent to distributions and imposes that
12authority and responsibility on one or more other members, the
13liability stated in subsection (a) applies to the other members
14and not the member that the operating agreement relieves of
15authority and responsibility.
16    (c) If the members of a member-managed company or the
17members or managers of a manager-managed company consent to a
18distribution that violates the articles of organization or the
19operating agreement, but does not violate Section 25-30, by a
20vote that would have been sufficient to amend the articles of
21organization or operating agreement, as the case may be, the
22liability stated in subsection (a) does not apply.
23    (d) (b) A person that receives a distribution and that
24member of a manager-managed company who knew the a distribution
25was made in violation of Section 25-30, the articles of
26organization, or the operating agreement is personally liable

 

 

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1to the company, but only to the extent that the distribution
2received by the person member exceeded the amount that could
3have been properly paid under Section 25-30.
4    (e) (c) A person member or manager against whom an action
5is brought under this Section may implead in the action:
6        (1) all other members or managers who consented voted
7    for or assented to the distribution in violation of
8    subsection (a) of this Section and may compel contribution
9    from them; and
10        (2) all persons members who received a distribution in
11    violation of subsection (d) (b) of this Section and may
12    compel contribution from any person receiving such a
13    distribution the member in the amount received in violation
14    of subsection (d) (b) of this Section.
15    (f) (d) A proceeding under this Section is barred unless it
16is commenced within 2 years after the distribution.
17(Source: P.A. 90-424, eff. 1-1-98.)
 
18    (805 ILCS 180/Art. 30 heading)
19
Article 30. Transfer Assignment of Distributional Membership
20
Interests

 
21    (805 ILCS 180/30-5)
22    Sec. 30-5. Transfer of a distributional interest.
23    (a) A transfer of a distributional interest in whole or in
24part:

 

 

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1        (1) does not by itself cause dissolution and winding up
2    of the limited liability company's activities; and
3        (2) is subject to Section 30-10.
4    (b) A transfer of a distributional interest does not
5entitle the transferee to become or to exercise any rights of a
6member. A transfer entitles the transferee to receive, to the
7extent transferred, only the distributions to which the
8transferor would be entitled.
9(Source: P.A. 90-424, eff. 1-1-98.)
 
10    (805 ILCS 180/30-10)
11    Sec. 30-10. Rights of a transferee.
12    (a) A transferee of a distributional interest may become a
13member of a limited liability company if and to the extent that
14the transferor gives the transferee the right in accordance
15with authority described in the operating agreement or all
16other members consent.
17    (b) A transferee who has become a member, to the extent
18transferred, has the rights and powers, and is subject to the
19restrictions and liabilities, of a member under the operating
20agreement of a limited liability company and this Act. A
21transferee who becomes a member also is liable for the
22transferor member's obligations to make contributions under
23Section 20-5 and for obligations under Section 25-35 to return
24unlawful distributions, but the transferee is not obligated for
25the transferor member's liabilities unknown to the transferee

 

 

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1at the time the transferee becomes a member.
2    (c) Whether or not a transferee of a distributional
3interest becomes a member under subsection (a) of this Section,
4the transferor is not released from liability to the limited
5liability company under the operating agreement or this Act.
6    (d) A transferee who does not become a member is not
7entitled to participate in the management or conduct of the
8limited liability company's business, require access to
9information concerning the company's transactions, or, except
10as provided in subsections (c) and (d) of Section 1-40, inspect
11or copy any of the company's records.
12    (e) A transferee who does not become a member is entitled
13to:
14        (1) receive, in accordance with the transfer,
15    distributions to which the transferor would otherwise be
16    entitled;
17        (2) receive, upon dissolution and winding up of the
18    limited liability company's business:
19            (A) in accordance with the transfer, the net amount
20        otherwise distributable to the transferor; and
21            (B) a statement of account only from the date of
22        the latest statement of account agreed to by all the
23        members. ; and
24        (3) seek under subdivision (5) of Section 35-1 a
25    judicial determination that it is equitable to dissolve and
26    wind up the company's business.

 

 

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1    (f) A limited liability company need not give effect to a
2transfer until it has notice of the transfer.
3(Source: P.A. 97-813, eff. 7-13-12.)
 
4    (805 ILCS 180/30-20)
5    Sec. 30-20. Rights of creditor.
6    (a) On application by a judgment creditor of a member or
7transferee, a court may enter a charging order against the
8distributional interest of the judgment debtor for the
9unsatisfied amount of the judgment. A charging order
10constitutes a lien on a judgment debtor's distributional
11interest and requires the limited liability company to pay over
12to the person to which the charging order was issued any
13distribution that would otherwise be paid to the judgment
14debtor. A charging order grants no other rights with respect to
15the assets or affairs of the company On application by a
16judgment creditor of a member of a limited liability company or
17of a member's transferee, a court having jurisdiction may
18charge the distributional interest of the judgment debtor to
19satisfy the judgment. The court may appoint a receiver of the
20share of the distributions due or to become due to the judgment
21debtor and make all other orders, directions, accounts, and
22inquiries the judgment debtor might have made or which the
23circumstances may require to give effect to the charging order.
24    (b) To the extent necessary to effectuate the collection of
25distributions pursuant to a charging order in effect under

 

 

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1subsection (a), the court may:
2        (1) appoint a receiver of the distributions subject to
3    the charging order, with the power to make all inquiries
4    the judgment debtor might have made; and
5        (2) make all other orders necessary to give effect to
6    the charging order. A charging order constitutes a lien on
7    the judgment debtor's distributional interest. The court
8    may order a foreclosure of a lien on a distributional
9    interest subject to the charging order at any time. A
10    purchaser at the foreclosure sale has the rights of a
11    transferee.
12    (c) At any time the court may foreclose the lien and order
13the sale of the distributional interest. The purchaser at the
14foreclosure sale obtains only the distributional interest,
15does not thereby become a member, and is subject to Section
1630-10. At any time before foreclosure, a distributional
17interest in a limited liability company that is charged may be
18redeemed:
19        (1) by the judgment debtor;
20        (2) with property other than the company's property, by
21    one or more of the other members; or
22        (3) with the company's property, but only if permitted
23    by the operating agreement.
24    (d) At any time before foreclosure under subsection (c),
25the member or transferee whose distributional interest is
26subject to a charging order under subsection (a) may extinguish

 

 

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1the charging order by satisfying the judgment and filing a
2certified copy of the satisfaction with the court that issued
3the charging order. This Act does not affect a member's right
4under exemption laws with respect to the member's
5distributional interest in a limited liability company.
6    (e) At any time before foreclosure under subsection (c), a
7limited liability company or one or more members whose
8distributional interests are not subject to the charging order
9may satisfy the judgment and thereby succeed to the rights of
10the judgment creditor, including the charging order. This
11Section provides the exclusive remedy by which a judgment
12creditor of a member or a transferee may satisfy a judgment out
13of the judgment debtor's distributional interest in a limited
14liability company.
15    (f) This Act does not deprive any member or transferee of
16the benefit of any exemption laws applicable to the member's or
17transferee's distributional interest.
18    (g) This Section provides the exclusive remedy by which a
19person seeking to enforce a judgment against a member or
20transferee may, in the capacity of judgment creditor, satisfy
21the judgment from the judgment debtor's distributional
22interest. If and to the extent that other law permits a
23judgment creditor to obtain a lien against the distributional
24interest or other rights of a member or transferee of a member,
25the lien shall be treated as a charging order subject to all
26the provisions of this Section.

 

 

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1(Source: P.A. 90-424, eff. 1-1-98.)
 
2    (805 ILCS 180/30-25 new)
3    Sec. 30-25. Power of personal representative of deceased
4member. If a member dies, the deceased member's personal
5representative or other legal representative may exercise the
6rights of a transferee provided in subsection (e) of Section
730-10 and, for the purposes of settling the estate, the rights
8of a current member under Section 10-15.
 
9    (805 ILCS 180/35-1)
10    Sec. 35-1. Events causing dissolution and winding up of
11company's business.
12    (a) A limited liability company is dissolved, and, unless
13continued pursuant to subsection (b) of Section 35-3, its
14business must be wound up, upon the occurrence of any of the
15following events:
16        (1) An event or circumstance that causes the
17    dissolution of a company by the express terms of specified
18    in the operating agreement.
19        (2) The consent of all members Consent of the number or
20    percentage of members specified in the operating
21    agreement.
22        (3) The passage of 180 consecutive days during which
23    the company has no members An event that makes it unlawful
24    for all or substantially all of the business of the company

 

 

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1    to be continued, but any cure of illegality within 90 days
2    after notice to the company of the event is effective
3    retroactively to the date of the event for purposes of this
4    Section.
5        (4) On application by a member or a dissociated member,
6    upon entry of a judicial decree that:
7            (A) the economic purpose of the company has been or
8        is likely to be unreasonably frustrated;
9            (B) the another member has engaged in conduct of
10        all or substantially all of relating to the company's
11        activities is unlawful business that makes it not
12        reasonably practicable to carry on the company's
13        business with that member;
14            (C) it is not otherwise reasonably practicable to
15        carry on the company's business in conformity with the
16        articles of organization and the operating agreement. ;
17        (5) On application by a member or transferee of a (D)
18    the company failed to purchase the petitioner's
19    distributional interest, upon entry of a judicial decree
20    that as required by Section 35-60; or (E) the managers or
21    those members in control of the company:
22            (A) have acted, are acting, or will act in a manner
23        that is illegal, oppressive, or fraudulent; or with
24        respect to the petitioner.
25            (B) have acted or are acting in a manner that is
26        oppressive and was, is, or will be directly harmful to

 

 

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1        the applicant.
2        (5) On application by a transferee of a member's
3    interest, a judicial determination that it is equitable to
4    wind up the company's business.
5        (6) Administrative dissolution under Section 35-25.
6    (b) In a proceeding under subdivision (4) or (5) of
7subsection (a), the court may order a remedy other than
8dissolution including, but not limited to, a buyout of the
9applicant's membership interest.
10(Source: P.A. 90-424, eff. 1-1-98.)
 
11    (805 ILCS 180/35-3)
12    Sec. 35-3. Limited liability company continues after
13dissolution.
14    (a) Subject to subsections (b), and (c), and (d) of this
15Section, a limited liability company continues after
16dissolution only for the purpose of winding up its business.
17    (b) At any time after the dissolution of a limited
18liability company and before the winding up of its business is
19completed, the members, including a dissociated member whose
20dissociation caused the dissolution, may unanimously waive the
21right to have the company's business wound up and the company
22terminated. In that case Any such waiver shall take effect
23upon:
24        (1) (blank);
25        (2) (blank);

 

 

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1        (3) the filing with the Secretary of State by the
2    limited liability company of all reports then due and
3    theretofore becoming due;
4        (4) the payment to the Secretary of State by the
5    limited liability company of all fees and penalties then
6    due and theretofore becoming due; and
7        (5) the filing of articles of revocation of dissolution
8    setting forth:
9            (A) the name of the limited liability company at
10        the time of filing the articles of dissolution;
11            (B) if the name is not available for use as
12        determined by the Secretary of State at the time of
13        filing the articles of revocation of dissolution, the
14        name of the limited liability company as changed,
15        provided that any change of name is properly effected
16        under Section 1-10 and Section 5-25 of this Act;
17            (C) the effective date of the dissolution that was
18        revoked;
19            (D) the date that the revocation of dissolution was
20        authorized;
21            (E) a statement that the members have unanimously
22        waived the right to have the company's business wound
23        up and the company terminated; and
24            (F) the address, including street and number or
25        rural route number, of the registered office of the
26        limited liability company upon revocation of

 

 

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1        dissolution and the name of its registered agent at
2        that address upon the revocation of dissolution of the
3        limited liability company, provided that any change
4        from either the registered office or the registered
5        agent at the time of dissolution is properly reported
6        under Section 1-35 of this Act.
7    Upon compliance with the provisions of this subsection, the
8Secretary of State shall file the articles of revocation of
9dissolution. Upon filing of the articles of revocation of
10dissolution:
11        (1) (i) the limited liability company resumes carrying
12    on its business as if dissolution had never occurred, and
13    any liability incurred by the limited liability company or
14    a member after the dissolution and before the waiver is
15    determined as if the dissolution had never occurred; and
16        (2) (ii) the rights of a third party accruing under
17    subsection (a) of Section 35-7 or arising out of conduct in
18    reliance on the dissolution before the third party knew or
19    received a notification of the waiver are not adversely
20    affected.
21    (c) If there are no members, the legal representative of
22the last remaining member may, within one year after the
23occurrence of the event that caused the dissociation of the
24last remaining member, agree in writing to continue the limited
25liability company. In that event, the legal representative or
26its nominee or designee will be admitted to the company as a

 

 

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1member and the company will not be dissolved or its business
2wound up until the occurrence of a future event of dissolution,
3if any.
4    (d) This Section does not apply in the case of a
5dissolution described in subdivision (4), (5), or (6) of
6Section 35-1.
7    (c) Unless otherwise provided in the articles of
8organization or the operating agreement, the limited liability
9company is not dissolved and is not required to be wound up if:
10        (1) within 6 months or such period as is provided for
11    in the articles of organization or the operating agreement
12    after the occurrence of the event that caused the
13    dissociation of the last remaining member, the personal
14    representative of the last remaining member agrees in
15    writing to continue the limited liability company until the
16    admission of the personal representative of that member or
17    its nominee or designee to the limited liability company as
18    a member, effective as of the occurrence of the event that
19    caused the dissociation of the last remaining member,
20    provided that the articles of organization or the operating
21    agreement may provide that the personal representative of
22    the last remaining member shall be obligated to agree in
23    writing to continue the limited liability company and to
24    the admission of the personal representative of that member
25    or its nominee or designee to the limited liability company
26    as a member, effective as of the occurrence of the event

 

 

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1    that caused the dissociation of the last remaining member;
2    or
3        (2) a member is admitted to the limited liability
4    company in the manner provided for in the articles of
5    organization or the operating agreement, effective as of
6    the occurrence of the event that caused the dissociation of
7    the last remaining member, within 6 months or such other
8    period as is provided for in the operating agreement after
9    the occurrence of the event that caused the dissociation of
10    the last remaining member, pursuant to a provision of the
11    articles of organization or the operating agreement that
12    specifically provides for the admission of a member to the
13    limited liability company after there is no longer a
14    remaining member of the limited liability company.
15(Source: P.A. 98-720, eff. 7-16-14.)
 
16    (805 ILCS 180/35-4)
17    Sec. 35-4. Wind Right to wind up of limited liability
18company's business.
19    (a) After dissolution, a member who has not wrongfully
20dissociated may participate in winding up a limited liability
21company's business, but on application of any member, member's
22legal representative, or transferee, the Circuit Court, for
23good cause shown, may order judicial supervision of the winding
24up.
25    (b) If a dissolved limited liability company has no

 

 

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1members, the A legal representative of the last person to have
2been a surviving member may wind up the a limited liability
3company's business of the company. If the person does so, the
4person has the powers of a sole manager under subsection (b) of
5Section 15-1 and is deemed to be a manager for the purposes of
6subsection (a) of Section 10-10.
7    (c) A person winding up a limited liability company's
8business (1) may preserve the company's business or property as
9a going concern for a reasonable time, prosecute and defend
10actions and proceedings, whether civil, criminal, or
11administrative, settle and close the company's business,
12dispose of and transfer the company's property, settle disputes
13by mediation or arbitration, and perform other acts necessary
14or appropriate to winding up and (2) shall discharge the
15company's debts, obligations, or other liabilities, settle and
16close the company's business and marshal and distribute the
17assets of the company pursuant to Section 35-10, settle
18disputes by mediation or arbitration, and perform other
19necessary acts.
20    (d) If the legal representative under subsection (b)
21declines or fails to wind up the company's business, a person
22may be appointed to do so by the consent of transferees owning
23a majority of the rights to receive distributions as
24transferees at the time the consent is to be effective. A
25person appointed under this subsection:
26        (1) has the powers of a sole manager under subsection

 

 

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1    (b) of Section 15-1 and is deemed to be a manager for the
2    purposes of subsection (a) of Section 10-10; and
3        (2) shall promptly deliver to the Secretary of State
4    for filing an amendment to the company's articles of
5    organization to:
6            (A) state that the company has no members;
7            (B) state that the person has been appointed
8        pursuant to this subsection to wind up the company; and
9            (C) provide the mailing addresses of the person.
10    (e) The circuit court may order judicial supervision of the
11winding up of a dissolved limited liability company, including
12the appointment of a person to wind up the company's business:
13        (1) on application of a member, if the applicant
14    establishes good cause;
15        (2) on the application of a transferee, if:
16            (A) the company does not have any members;
17            (B) the legal representative of the last person to
18        have been a member declines or fails to wind up the
19        company's business; and
20            (C) within a reasonable time following the
21        dissolution a person has not been appointed pursuant to
22        subsection (d); or
23        (3) in connection with a proceeding under subdivision
24    (4) of subsection (a) of Section 35-1.
25(Source: P.A. 90-424, eff. 1-1-98.)
 

 

 

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1    (805 ILCS 180/35-7)
2    Sec. 35-7. Member or manager's power and liability as agent
3after dissolution.
4    (a) A limited liability company is bound by a member or
5manager's act after dissolution that:
6        (1) is appropriate for winding up the company's
7    business; or
8        (2) would have bound the company under Section 13-5
9    before dissolution, if the other party to the transaction
10    did not have notice of the dissolution.
11    (b) A member or manager who, with knowledge of the
12dissolution, subjects a limited liability company to liability
13by an act that is not appropriate for winding up the company's
14business is liable to the company for any damage caused to the
15company arising from the liability.
16(Source: P.A. 90-424, eff. 1-1-98.)
 
17    (805 ILCS 180/35-15)
18    Sec. 35-15. Statement Articles of termination dissolution.
19When a all debts, liabilities, and obligations of the limited
20liability company has been wound up, a statement of termination
21have been paid and discharged or adequate provision has been
22made therefor and all of the remaining property and assets of
23the limited liability company have been distributed to the
24members, articles of dissolution shall be executed in duplicate
25in the manner prescribed in Section 5-45 and shall set forth

 

 

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1all of the following:
2        (1) The name of the limited liability company; .
3        (2) A post office address to which may be mailed a copy
4    of any process against the company that may be served upon
5    the Secretary of State; and
6        (3) A statement that the limited liability company has
7    been terminated (2) That all debts, obligations, and
8    liabilities of the limited liability company have been paid
9    and discharged or that adequate provision has been made
10    therefor.
11        (3) That all the remaining property and assets of the
12    limited liability company have been distributed among its
13    members in accordance with their respective rights and
14    interests.
15        (4) That there are no suits pending against the company
16    in any court or that adequate provision has been made for
17    the satisfaction of any judgment, order, or decree that may
18    be entered against it in any pending suit.
19(Source: P.A. 87-1062.)
 
20    (805 ILCS 180/35-20)
21    Sec. 35-20. Filing of statement articles of termination
22dissolution.
23    (a) Duplicate originals of the statement articles of
24termination dissolution shall be delivered to the Secretary of
25State. If the Secretary of State finds that the statement

 

 

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1articles of termination conforms dissolution conform to law, he
2or she shall, when all required fees have been paid:
3        (1) endorse on each duplicate original the word "Filed"
4    and the date of the filing thereof; and
5        (2) file one duplicate original in his or her office.
6    (b) A duplicate original of the statement articles of
7termination dissolution shall be returned to the
8representative of the dissolved limited liability company.
9Upon the filing of a statement the articles of termination
10dissolution, the existence of the company shall terminate, and
11its articles of organization shall be deemed cancelled, except
12for the purpose of suits, other proceedings, and appropriate
13action as provided in this Article. The manager or managers or
14member or members at the time of termination, or those that
15remain, shall thereafter be trustee for the members and
16creditors of the terminated company and, in that capacity,
17shall have authority to convey or distribute any company
18property discovered after termination and take any other action
19that may be necessary on behalf of and in the name of the
20terminated company.
21(Source: P.A. 90-424, eff. 1-1-98.)
 
22    (805 ILCS 180/35-37 new)
23    Sec. 35-37. Administrative dissolution; limited liability
24company name. The Secretary of State shall not allow another
25limited liability company or corporation to use the name of a

 

 

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1domestic limited liability company that has been
2administratively dissolved until 3 years have elapsed
3following the date of issuance of the notice of dissolution. If
4the domestic limited liability company that has been
5administratively dissolved is reinstated within 3 years after
6the date of issuance of the notice of dissolution, the domestic
7limited liability company shall continue under its previous
8name unless the limited liability company changes its name upon
9reinstatement.
 
10    (805 ILCS 180/35-45)
11    Sec. 35-45. Events causing member's dissociation. A member
12is dissociated from a limited liability company upon the
13occurrence of any of the following events:
14    (1) The company's having notice of the member's express
15will to withdraw upon the date of notice or on a later date
16specified by the member.
17    (2) An event agreed to in the operating agreement as
18causing the member's dissociation.
19    (3) Upon transfer of all of a member's distributional
20interest, other than a transfer for security purposes or a
21court order charging the member's distributional interest that
22has not been foreclosed.
23    (4) The member's expulsion pursuant to the operating
24agreement.
25    (5) The member's expulsion by unanimous vote of the other

 

 

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1members if:
2        (A) it is unlawful to carry on the company's business
3    with the member;
4        (B) there has been a transfer of substantially all of
5    the member's distributional interest, other than a
6    transfer for security purposes or a court order charging
7    the member's distributional interest that has not been
8    foreclosed;
9        (C) within 90 days after the company notifies a
10    corporate member that it will be expelled because it has
11    filed a certificate of dissolution or the equivalent, its
12    charter has been revoked, or its right to conduct business
13    has been suspended by the jurisdiction of its
14    incorporation, the member fails to obtain a revocation of
15    the certificate of dissolution or a reinstatement of its
16    charter or its right to conduct business; or
17        (D) a partnership or a limited liability company that
18    is a member has been dissolved and its business is being
19    wound up.
20    (6) On application by the company or another member, the
21member's expulsion by judicial determination because the
22member:
23        (A) engaged in wrongful conduct that adversely and
24    materially affected the company's business;
25        (B) willfully or persistently committed a material
26breach of the operating agreement or of a duty owed to the

 

 

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1company or the other members under Section 15-3; or
2        (C) engaged in conduct relating to the company's
3business that makes it not reasonably practicable to carry on
4the business with the member.
5    (7) The member's:
6        (A) becoming a debtor in bankruptcy;
7        (B) executing an assignment for the benefit of
8    creditors;
9        (C) seeking, consenting to, or acquiescing in the
10    appointment of a trustee, receiver, or liquidator of the
11    member or of all or substantially all of the member's
12    property; or
13        (D) failing, within 90 days after the appointment, to
14    have vacated or stayed the appointment of a trustee,
15    receiver, or liquidator of the member or of all or
16    substantially all of the member's property obtained
17    without the member's consent or acquiescence, or failing
18    within 90 days after the expiration of a stay to have the
19    appointment vacated.
20    (8) In the case of a member who is an individual:
21        (A) the member's death;
22        (B) the appointment of a guardian or general
23    conservator for the member; or
24        (C) a judicial determination that the member has
25    otherwise become incapable of performing the member's
26    duties under the operating agreement.

 

 

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1    (9) In the case of a member that is a trust or is acting as
2a member by virtue of being a trustee of a trust, distribution
3of the trust's entire rights to receive distributions from the
4company, but not merely by reason of the substitution of a
5successor trustee.
6    (10) In the case of a member that is an estate or is acting
7as a member by virtue of being a personal representative of an
8estate, distribution of the estate's entire rights to receive
9distributions from the company, but not merely the substitution
10of a successor personal representative.
11    (11) Termination of the existence of a member if the member
12is not an individual, estate, or trust other than a business
13trust.
14    (12) In the case of a company that participates in a merger
15under Article 37, if:
16        (A) the company is not the surviving entity; or
17        (B) otherwise as a result of the merger, the person
18    ceases to be a member.
19    (13) The company participates in a conversion under Article
2037.
21    (14) The company participates in a domestication under
22Article 37, if, as a result, the person ceases to be a member.
23(Source: P.A. 90-424, eff. 1-1-98.)
 
24    (805 ILCS 180/35-55)
25    Sec. 35-55. Effect of member's dissociation.

 

 

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1    (a) Upon a member's dissociation the company must cause the
2dissociated member's distributional interest to be purchased
3under Section 35-60. (b) Upon a member's dissociation from a
4limited liability company:
5        (1) the member's right to participate in the management
6    and conduct of the company's business terminates, except as
7    otherwise provided in Section 35-4, and the member ceases
8    to be a member and is treated the same as a transferee of a
9    member;
10        (2) the member's fiduciary duties terminate, except as
11    provided in subdivision (3) of this subsection (a) (b); and
12        (3) the member's duty of loyalty under subdivisions (1)
13    and (2) of subsection (b) of Section 15-3 and duty of care
14    under subsection (c) of Section 15-3 continue only with
15    regard to matters arising and events occurring before the
16    member's dissociation, unless the member participates in
17    winding up the company's business pursuant to Section 35-4;
18    and .
19        (4) subject to Section 30-25 and Article 37, any
20    distributional interest owned by the person immediately
21    before dissociation in the person's capacity as a member is
22    owned by the person solely as a transferee.
23    (b) A person's dissociation as a member of a limited
24liability company does not of itself discharge the person from
25any debt, obligation, or other liability to the company or the
26other members which the person incurred while a member.

 

 

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1(Source: P.A. 90-424, eff. 1-1-98.)
 
2    (805 ILCS 180/Art. 37 heading)
3
Article 37. Conversions, domestications, mergers, and series
4(Source: P.A. 97-839, eff. 7-20-12.)
 
5    (805 ILCS 180/37-5)
6    Sec. 37-5. Definitions. In this Article:
7    "Constituent limited liability company" means a
8constituent organization that is a limited liability company.
9    "Constituent organization" means an organization that is
10party to a merger.
11    "Converted organization" means the organization into which
12a converting organization converts pursuant to Sections 37-10
13through 37-17.
14    "Converting limited liability company" means a converting
15organization that is a limited liability company.
16    "Converting organization" means an organization that
17converts into another organization pursuant to Sections 37-10
18through 37-17.
19    "Domesticated company" means the company that exists after
20a domesticating foreign limited liability company or limited
21liability company effects a domestication pursuant to Sections
2237-31 through 37-34.
23    "Domesticating company" means the company that effects a
24domestication pursuant to Sections 37-31 through 37-34.

 

 

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1    "Governing statute" means the statute that governs an
2organization's internal affairs.
3    "Organization" means a general partnership, including a
4limited liability partnership, limited partnership, including
5a limited liability limited partnership, limited liability
6company, business trust, corporation, or any other person
7having a governing statute. The term includes a domestic or
8foreign organization regardless of whether organized for
9profit.
10    "Organizational document" means:
11        (1) for a domestic or foreign general partnership, its
12    partnership agreement;
13        (2) for a limited partnership or foreign limited
14    partnership, its certificate of limited partnership and
15    partnership agreement;
16        (3) for a domestic or foreign limited liability
17    company, its certificate or articles of organization and
18    operating agreement, or comparable records as provided in
19    its governing statute;
20        (4) for a business trust, its agreement of trust and
21    declaration of trust;
22        (5) for a domestic or foreign corporation for profit,
23    its articles of incorporation, bylaws, and any agreements
24    among its shareholders which are authorized by its
25    governing statute, or comparable records as provided in its
26    governing statute; and

 

 

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1        (6) for any other organization, the basic records that
2    create the organization and determine its internal
3    governance and the relations among the persons that own it,
4    have an interest in it, or are members of it.
5    "Personal liability" means liability for a debt,
6obligation, or other liability of an organization which is
7imposed on a person that co-owns, has an interest in, or is a
8member of the organization:
9        (1) by the governing statute solely by reason of the
10    person co-owning, having an interest in, or being a member
11    of the organization; or
12        (2) by the organization's organizational documents
13    under a provision of the governing statute authorizing
14    those documents to make one or more specified persons
15    liable for all or specified debts, obligations, or other
16    liabilities of the organization solely by reason of the
17    person or persons co-owning, having an interest in, or
18    being a member of the organization.
19    "Surviving organization" means an organization into which
20one or more other organizations are merged, whether the
21organization preexisted the merger or was created by the
22merger.
23    "Corporation" means (i) a corporation under the Business
24Corporation Act of 1983, a predecessor law, or comparable law
25of another jurisdiction or (ii) a bank or savings bank.
26    "General partner" means a partner in a partnership and a

 

 

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1general partner in a limited partnership.
2    "Limited partner" means a limited partner in a limited
3partnership.
4    "Limited partnership" means a limited partnership created
5under the Uniform Limited Partnership Act (2001), a predecessor
6law, or comparable law of another jurisdiction.
7    "Partner" includes a general partner and a limited partner.
8    "Partnership" means a general partnership under the
9Uniform Partnership Act (1997), a predecessor law, or
10comparable law of another jurisdiction.
11    "Partnership agreement" means an agreement among the
12partners concerning the partnership or limited partnership.
13    "Shareholder" means a shareholder in a corporation.
14(Source: P.A. 96-328, eff. 8-11-09.)
 
15    (805 ILCS 180/37-10)
16    Sec. 37-10. Conversion of partnership or limited
17partnership to limited liability company.
18    (a) An organization other than a limited liability company
19or a foreign limited liability company may convert to a limited
20liability company, and a limited liability company may convert
21to an organization other than a foreign limited liability
22company pursuant to this Section, Sections 37-15 through 37-17,
23and a plan of conversion, if:
24        (1) the other organization's governing statute
25    authorizes the conversion;

 

 

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1        (2) the conversion is not prohibited by the law of the
2    jurisdiction that enacted the other organization's
3    governing statute; and
4        (3) the other organization complies with its governing
5    statute in effecting the conversion.
6    (b) A plan of conversion must be in a record and must
7include:
8        (1) the name and form of the organization before
9    conversion;
10        (2) the name and form of the organization after
11    conversion;
12        (3) the terms and conditions of the conversion,
13    including the manner and basis for converting interests in
14    the converting organization into any combination of money,
15    interests in the converted organization, and other
16    consideration; and
17        (4) the organizational documents of the converted
18    organization that are, or are proposed to be, in a record.
19    A partnership or limited partnership may be converted to a
20    limited liability company pursuant to this Section if
21    conversion to a limited liability company is permitted
22    under the law governing the partnership or limited
23    partnership.
24    (b) The terms and conditions of a conversion of a
25partnership or limited partnership to a limited liability
26company must be approved by all of the partners or by a number

 

 

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1or percentage of the partners required for conversion in the
2partnership agreement.
3    (c) An agreement of conversion must set forth the terms and
4conditions of the conversion of the interests of partners of a
5partnership or of a limited partnership, as the case may be,
6into interests in the converted limited liability company or
7the cash or other consideration to be paid or delivered as a
8result of the conversion of the interests of the partners, or a
9combination thereof.
10    (d) After a conversion is approved under subsection (b) of
11this Section, the partnership or limited partnership shall file
12articles of organization in the office of the Secretary of
13State that satisfy the requirements of Section 5-5 and contain
14all of the following:
15        (1) A statement that the partnership or limited
16    partnership was converted to a limited liability company
17    from a partnership or limited partnership, as the case may
18    be.
19        (2) Its former name.
20        (3) A statement of the number of votes cast by the
21    partners entitled to vote for and against the conversion
22    and, if the vote is less than unanimous, the number or
23    percentage required to approve the conversion under
24    subsection (b) of this Section.
25        (4) In the case of a limited partnership, a statement
26    that the certificate of limited partnership shall be

 

 

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1    canceled as of the date the conversion took effect.
2    (e) In the case of a limited partnership, the filing of
3articles of organization under subsection (d) of this Section
4cancels its certificate of limited partnership as of the date
5the conversion took effect.
6    (f) A conversion takes effect when the articles of
7organization are filed in the office of the Secretary of State
8or on a date specified in the articles of organization not
9later than 30 days subsequent to the filing of the articles of
10organization.
11    (g) A general partner who becomes a member of a limited
12liability company as a result of a conversion remains liable as
13a partner for an obligation incurred by the partnership or
14limited partnership before the conversion takes effect.
15    (h) A general partner's liability for all obligations of
16the limited liability company incurred after the conversion
17takes effect is that of a member of the company. A limited
18partner who becomes a member as a result of a conversion
19remains liable only to the extent the limited partner was
20liable for an obligation incurred by the limited partnership
21before the conversion takes effect.
22(Source: P.A. 90-424, eff. 1-1-98.)
 
23    (805 ILCS 180/37-15)
24    Sec. 37-15. Effect of conversion; entity unchanged.
25    (a) An organization A partnership or limited partnership

 

 

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1that has been converted pursuant to Sections 37-10 through
237-17 under this Article is for all purposes the same entity
3that existed before the conversion.
4    (b) When a conversion takes effect:
5        (1) all property owned by the converting organization
6    remains vested in the converted organization partnership
7    or limited partnership vests in the limited liability
8    company;
9        (2) all debts, liabilities, and other obligations, or
10    other liabilities of the converting organization
11    partnership or limited partnership continue as debts,
12    obligations, or other liabilities of the converted
13    organization limited liability company;
14        (3) an action or proceeding pending by or against the
15    converting organization partnership or limited partnership
16    may be continued as if the conversion had not occurred;
17        (4) except as prohibited by other law other than
18    Article 37, all of the rights, privileges, immunities,
19    powers, and purposes of the converting organization remain
20    vested in the converted organization partnership or
21    limited partnership vest in the limited liability company;
22    and
23        (5) except as otherwise provided in the plan of
24    conversion, the terms and conditions of the plan of
25    conversion take effect; and
26        (6) except as otherwise agreed, the conversion does not

 

 

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1    dissolve a converting limited liability company for the
2    purposes of Article 35.
3    (c) A converted organization that is a foreign organization
4consents to the jurisdiction of the courts of this State to
5enforce any debt, obligation, or other liability for which the
6converting limited liability company is liable if, before the
7conversion, the converting limited liability company was
8subject to suit in this State on the debt, obligation, or other
9liability. A converted organization that is a foreign
10organization and not authorized to transact business in this
11State appoints the Secretary of State as its agent for service
12of process for purposes of enforcing a debt, obligation, or
13other liability under this subsection. Service on the Secretary
14of State under this subsection must be made in the same manner
15and has the same consequences as in subsections (b) and (c) of
16Section 1-50. agreement of conversion under Section 37-10, all
17of the partners of the converting partnership continue as
18members of the limited liability company.
19    (d) A converted organization that is a foreign organization
20may not do business in this State until an application for that
21authority is filed with the Secretary of State.
22(Source: P.A. 90-424, eff. 1-1-98.)
 
23    (805 ILCS 180/37-16 new)
24    Sec. 37-16. Action on plan of conversion by converting
25limited liability company.

 

 

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1    (a) Subject to Section 37-36, a plan of conversion must be
2consented to by all the members of a converting limited
3liability company.
4    (b) Subject to Section 37-36 and any contractual rights,
5after a conversion is approved, and at any time before a filing
6is made under Section 37-17, a converting limited liability
7company may amend the plan or abandon the conversion:
8        (1) as provided in the plan; or
9        (2) except as otherwise prohibited in the plan, by the
10    same consent as was required to approve the plan.
 
11    (805 ILCS 180/37-17 new)
12    Sec. 37-17. Filings required for conversion; effective
13date.
14    (a) After a plan of conversion is approved:
15        (1) a converting limited liability company shall
16    deliver to the Secretary of State for filing articles of
17    conversion, which must be executed as provided in Section
18    5-45 and must include:
19            (A) a statement that the limited liability company
20        has been converted into another organization;
21            (B) the name and form of the organization and the
22        jurisdiction of its governing statute;
23            (C) the date the conversion is effective under the
24        governing statute of the converted organization;
25            (D) a statement that the conversion was approved as

 

 

HB4361- 76 -LRB099 15485 KTG 39774 b

1        required by this Act;
2            (E) a statement that the conversion was approved as
3        required by the governing statute of the converted
4        organization; and
5            (F) if the converted organization is a foreign
6        organization not authorized to transact business in
7        this State, the street and mailing addresses of an
8        office which the Secretary of State may use for the
9        purposes of subsection (c) of Section 37-15; and
10        (2) if the converting organization is not a converting
11    limited liability company, the converting organization
12    shall deliver to the Secretary of State for filing,
13    articles of organization, which must include, in addition
14    to the information required by Section 5-5:
15            (A) a statement that the converted organization
16        was converted from another organization;
17            (B) the name and form of the converting
18        organization and the jurisdiction of its governing
19        statute; and
20            (C) a statement that the conversion was approved in
21        a manner that complied with the converting
22        organization's governing statute.
23    (b) A conversion becomes effective:
24        (1) if the converted organization is a limited
25    liability company, when the articles of organization take
26    effect; and

 

 

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1        (2) if the converted organization is not a limited
2    liability company, as provided by the governing statute of
3    the converted organization.
 
4    (805 ILCS 180/37-20)
5    Sec. 37-20. Merger of entities.
6    (a) A Pursuant to a plan of merger approved under
7subsection (c) of this Section, a limited liability company may
8merge be merged with one or more other constituent
9organizations pursuant to this Section, Sections 37-21 through
1037-30, and a plan of merger, if:
11        (1) the governing statute of each of the other
12    organizations authorizes the merger;
13        (2) the merger is not prohibited by the law of a
14    jurisdiction that enacted any of the governing statutes;
15    and
16        (3) each of the other organizations complies with its
17    governing statute in effecting the merger. or into one or
18    more limited liability companies, foreign limited
19    liability companies, corporations, foreign corporations,
20    partnerships, foreign partnerships, limited partnerships,
21    foreign limited partnerships, or other domestic or foreign
22    entities if merger with or into a limited liability company
23    is permitted under the law governing the domestic or
24    foreign entity.
25    (b) A plan of merger must be in a record and must include

 

 

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1set forth all of the following:
2        (1) the The name and form of each constituent
3    organization; entity that is a party to the merger.
4        (2) the The name and form of the surviving organization
5    and, if the surviving organization is to be created by the
6    merger, a statement to that effect; entity into which the
7    other entities will merge.
8        (3) The type of organization of the surviving entity.
9        (3) the (4) The terms and conditions of the merger,
10    including the . (5) The manner and basis for converting the
11    interests in each constituent organization into any
12    combination of money, shares, obligations, or other
13    securities of each party to the merger into interests in ,
14    shares, obligations, or other securities of the surviving
15    organization, and other consideration; entity, or into
16    money or other property in whole or in part.
17        (4) if the surviving organization is to be created by
18    the merger, the surviving organization's organizational
19    documents that are proposed to be in a record; and
20        (5) if the surviving organization is not to be created
21    by the merger, any amendments to be made by the merger to
22    the surviving organization's organizational documents that
23    are, or are proposed to be, in a record.
24        (6) The street address of the surviving entity's
25    principal place of business.
26    (c) A plan of merger must be approved:

 

 

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1        (1) in the case of a limited liability company that is
2    a party to the merger, by all of the members or by a number
3    or percentage of members specified in the operating
4    agreement;
5        (2) in the case of a foreign limited liability company
6    that is a party to the merger, by the vote required for
7    approval of a merger by the law of the state or foreign
8    jurisdiction in which the foreign limited liability
9    company is organized;
10        (3) in the case of a partnership or domestic limited
11    partnership that is a party to the merger, by the vote
12    required for approval of a conversion under Section
13    37-5(b); and
14        (4) in the case of any other entities that are parties
15    to the merger, by the vote required for approval of a
16    merger by the law of this State or of the state or foreign
17    jurisdiction in which the entity is organized and, in the
18    absence of such a requirement, by all the owners of
19    interests in the entity.
20    (d) After a plan of merger is approved and before the
21merger takes effect, the plan may be amended or abandoned as
22provided in the plan.
23    (e) The merger is effective upon the filing of the articles
24of merger with the Secretary of State, or a later date as
25specified in the articles of merger not later than 30 days
26subsequent to the filing of the plan of merger under Section

 

 

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137-25.
2(Source: P.A. 90-424, eff. 1-1-98.)
 
3    (805 ILCS 180/37-21 new)
4    Sec. 37-21. Action on plan of merger by constituent limited
5liability company.
6    (a) Subject to Section 37-36, a plan of merger must be
7consented to by all the members of a constituent limited
8liability company.
9    (b) Subject to Section 37-36 and any contractual rights,
10after a merger is approved and at any time before articles of
11merger are delivered to the Secretary of State for filing under
12Section 37-25, a constituent limited liability company may
13amend the plan or abandon the merger:
14        (1) as provided in the plan; or
15        (2) except as otherwise prohibited in the plan, with
16    the same consent as was required to approve the plan.
 
17    (805 ILCS 180/37-25)
18    Sec. 37-25. Articles of merger.
19    (a) After each constituent organization has approved a
20approval of the plan of merger under Section 37-20, unless the
21merger is abandoned under subsection (d) of Section 37-20,
22articles of merger must be signed on behalf of:
23        (1) each constituent limited liability company as
24    provided in Section 5-45; and

 

 

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1        (2) each other constituent organization, as provided
2    in its governing statute and other entity that is a party
3    to the merger and delivered to the Secretary of State for
4    filing.
5    (b) Articles of merger under this Section The articles must
6include set forth all of the following:
7        (1) the The name and form of each constituent
8    organization and the jurisdiction of its governing
9    statute; formation or organization of each of the limited
10    liability companies and other entities that are parties to
11    the merger.
12        (2) For each limited liability company that is to
13    merge, the date its articles of organization were filed
14    with the Secretary of State.
15        (3) That a plan of merger has been approved and signed
16    by each limited liability company and other entity that is
17    to merge and, if a corporation is a party to the merger, a
18    copy of the plan as approved by the corporation shall be
19    attached to the articles.
20        (2) the (4) The name and form address of the surviving
21    organization, the jurisdiction of its governing statute
22    and, if the surviving organization is created by the
23    merger, a statement to that effect; limited liability
24    company or other surviving entity.
25        (3) the (5) The effective date of the merger is
26    effective under the governing statute of the surviving

 

 

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1    organization; .
2        (4) if the surviving organization is to be created by
3    the merger:
4            (A) if it will be a limited liability company, the
5        company's articles of organization; or
6            (B) if it will be an organization other than a
7        limited liability company, the organizational document
8        that creates the organization that is in a public
9        record;
10        (5) if the surviving organization preexists the
11    merger, any amendments provided for in the plan of merger
12    for the organizational document that created the
13    organization that are in a public record;
14        (6) a statement as to each constituent organization
15    that the merger was approved as required by the
16    organization's governing statute;
17        (7) if the surviving organization is a foreign
18    organization not authorized to transact business in this
19    State, the street and mailing addresses of an office the
20    Secretary of State may use for the purposes of subsection
21    (b) of Section 37-30; and
22        (8) any additional information required by the
23    governing statute of any constituent organization.
24    (c) Each constituent limited liability company shall
25deliver the articles of merger for filing to the Secretary of
26State, together with a copy of that portion of the plan of

 

 

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1merger that contains the name and form of each constituent
2organization and the surviving organization.
3    (d) A merger becomes effective:
4        (1) if the surviving organization is a limited
5    liability company, upon the later of:
6            (A) the filing of the articles of merger with the
7        Secretary of State; or
8            (B) subject to Section 5-40, as specified in the
9        articles of merger; or
10        (2) if the surviving organization is not a limited
11    liability company, as provided by the governing statute of
12    the surviving organization.
13        (6) If a limited liability company is the surviving
14    entity, any changes in its articles of organization that
15    are necessary by reason of the merger.
16        (7) If a party to a merger is a foreign limited
17    liability company, the jurisdiction and date of filing of
18    its initial articles of organization and the date when its
19    application for authority was filed by the Secretary of
20    State or, if an application has not been filed, a statement
21    to that effect.
22        (8) If the surviving entity is not a limited liability
23    company, an agreement that the surviving entity may be
24    served with process in this State and is subject to
25    liability in any action or proceeding for the enforcement
26    of any liability or obligation of any limited liability

 

 

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1    company previously subject to suit in this State which is
2    to merge, and for the enforcement, as provided in this Act,
3    of the right of members of any limited liability company to
4    receive payment for their interest against the surviving
5    entity.
6    (b) If a foreign limited liability company is the surviving
7entity of a merger, it may not do business in this State until
8an application for that authority is filed with the Secretary
9of State.
10    (c) The surviving limited liability company or other entity
11shall furnish a copy of the plan of merger, on request and
12without cost, to any member of any limited liability company or
13any person holding an interest in any other entity that is to
14merge.
15    (d) To the extent the articles of merger are inconsistent
16with the limited liability company's articles of organization,
17the articles of merger shall operate as an amendment to the
18company's articles of organization.
19(Source: P.A. 90-424, eff. 1-1-98.)
 
20    (805 ILCS 180/37-30)
21    Sec. 37-30. Effect of merger.
22    (a) When a merger becomes effective takes effect:
23        (1) the surviving organization continues or comes into
24    existence;
25        (2) each constituent organization that merges into the

 

 

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1    surviving organization ceases to exist as a separate
2    entity;
3        (3) all property owned by each constituent
4    organization that ceases to exist vests in the surviving
5    organization;
6        (4) all debts, obligations, or other liabilities of
7    each constituent organization that ceases to exist
8    continue as debts, obligations, or other liabilities of the
9    surviving organization;
10        (5) an action or proceeding pending by or against any
11    constituent organization that ceases to exist may be
12    continued as if the merger had not occurred;
13        (6) except as prohibited by other law, all of the
14    rights, privileges, immunities, powers, and purposes of
15    each constituent organization that ceases to exist vest in
16    the surviving organization;
17        (7) except as otherwise provided in the plan of merger,
18    the terms and conditions of the plan of merger take effect;
19        (8) except as otherwise agreed, if a constituent
20    limited liability company ceases to exist, the merger does
21    not dissolve the limited liability company for the purposes
22    of Article 35;
23        (9) if the surviving organization is created by the
24    merger:
25            (A) if it is a limited liability company, the
26        articles of organization become effective; or

 

 

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1            (B) if it is an organization other than a limited
2        liability company, the organizational document that
3        creates the organization becomes effective; and
4        (10) if the surviving organization preexisted the
5    merger, any amendments provided for in the articles of
6    merger for the organizational document that created the
7    organization become effective.
8    (b) A surviving organization that is a foreign organization
9consents to the jurisdiction of the courts of this State to
10enforce any debt, obligation, or other liability owed by a
11constituent organization, if before the merger the constituent
12organization was subject to suit in this State on the debt,
13obligation, or other liability. A surviving organization that
14is a foreign organization and not authorized to transact
15business in this State appoints the Secretary of State as its
16agent for service of process for the purposes of enforcing a
17debt, obligation, or other liability under this subsection.
18Service on the Secretary of State under this subsection must be
19made in the same manner and has the same consequences as in
20subsections (b) and (c) of Section 1-50.
21    (c) A surviving organization that is a foreign organization
22may not do business in this State until an application for that
23authority is filed with the Secretary of State.
24        (1) the separate existence of each limited liability
25    company and other entity that is a party to the merger,
26    other than the surviving entity, terminates;

 

 

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1        (2) all property owned by each of the limited liability
2    companies and other entities that are party to the merger
3    vests in the surviving entity;
4        (3) all debts, liabilities, and other obligations of
5    each limited liability company and other entity that is
6    party to the merger become the obligations of the surviving
7    entity;
8        (4) an action or proceeding pending by or against a
9    limited liability company or other party to a merger may be
10    continued as if the merger had not occurred or the
11    surviving entity may be substituted as a party to the
12    action or proceeding; and
13        (5) except as prohibited by other law, all the rights,
14    privileges, immunities, powers, and purposes of every
15    limited liability company and other entity that is a party
16    to a merger vest in the surviving entity.
17    (b) The Secretary of State is an agent for service of
18process in an action or proceeding against the surviving
19foreign entity to enforce an obligation of any party to a
20merger if the surviving foreign entity fails to appoint or
21maintain an agent designated for service of process in this
22State or the agent for service of process cannot with
23reasonable diligence be found at the designated office. Service
24is effected under this subsection (b) at the earliest of:
25        (1) the date the company receives the process, notice,
26    or demand;

 

 

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1        (2) the date shown on the return receipt, if signed on
2    behalf of the company; or
3        (3) 5 days after its deposit in the mail, if mailed
4    postpaid and correctly addressed.
5    (c) Service under subsection (b) of this Section shall be
6made by the person instituting the action by doing all of the
7following:
8        (1) Serving on the Secretary of State, or on any
9    employee having responsibility for administering this Act,
10    a copy of the process, notice, or demand, together with any
11    papers required by law to be delivered in connection with
12    service and paying the fee prescribed by Article 50 of this
13    Act.
14        (2) Transmitting notice of the service on the Secretary
15    of State and a copy of the process, notice, or demand and
16    accompanying papers to the surviving entity being served,
17    by registered or certified mail at the address set forth in
18    the articles of merger.
19        (3) Attaching an affidavit of compliance with this
20    Section, in substantially the form that the Secretary of
21    State may by rule prescribe, to the process, notice, or
22    demand.
23    (d) Nothing contained in this Section shall limit or affect
24the right to serve any process, notice, or demand required or
25permitted by law to be served upon a limited liability company
26in any other manner now or hereafter permitted by law.

 

 

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1    (e) A member of the surviving limited liability company is
2liable for all obligations of a party to the merger for which
3the member was personally liable before the merger.
4    (f) Unless otherwise agreed, a merger of a limited
5liability company that is not the surviving entity in the
6merger does not require the limited liability company to wind
7up its business under this Act or pay its liabilities and
8distribute its assets under this Act.
9(Source: P.A. 90-424, eff. 1-1-98.)
 
10    (805 ILCS 180/37-31 new)
11    Sec. 37-31. Domestication.
12    (a) A foreign limited liability company may become a
13limited liability company pursuant to this Section, Sections
1437-32, 37-33, and 37-34, and a plan of domestication, if:
15        (1) the foreign limited liability company's governing
16    statute authorizes the domestication;
17        (2) the domestication is not prohibited by the law of
18    the jurisdiction that enacted the governing statute; and
19        (3) the foreign limited liability company complies
20    with its governing statute in effecting the domestication.
21    (b) A limited liability company may become a foreign
22limited liability company pursuant to this Section, Sections
2337-32, 37-33, and 37-34, and a plan of domestication, if:
24        (1) the foreign limited liability company's governing
25    statute authorizes the domestication;

 

 

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1        (2) the domestication is not prohibited by the law of
2    the jurisdiction that enacted the governing statute; and
3        (3) the foreign limited liability company complies
4    with its governing statute in effecting the domestication.
5    (c) A plan of domestication must be in a record and must
6include:
7        (1) the name of the domesticating company before
8    domestication and the jurisdiction of its governing
9    statute;
10        (2) the name of the domesticated company after
11    domestication and the jurisdiction of its governing
12    statute;
13        (3) the terms and conditions of the domestication,
14    including the manner and basis for converting interests in
15    the domesticating company into any combination of money,
16    interests in the domesticated company, and other
17    consideration; and
18        (4) the organizational documents of the domesticated
19    company that are, or are proposed to be, in a record.
 
20    (805 ILCS 180/37-32 new)
21    Sec. 37-32. Action on plan of domestication by
22domesticating limited liability company.
23    (a) A plan of domestication must be consented to:
24        (1) by all the members, subject to Section 37-36, if
25    the domesticating company is a limited liability company;

 

 

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1    and
2        (2) as provided in the domesticating company's
3    governing statute, if the company is a foreign limited
4    liability company.
5    (b) Subject to any contractual rights, after a
6domestication is approved, and at any time before articles of
7domestication are delivered to the Secretary of State for
8filing under Section 37-33, a domesticating limited liability
9company may amend the plan or abandon the domestication:
10        (1) as provided in the plan; or
11        (2) except as otherwise prohibited in the plan, by the
12    same consent as was required to approve the plan.
 
13    (805 ILCS 180/37-33 new)
14    Sec. 37-33. Filings required for domestication; effective
15date.
16    (a) After a plan of domestication is approved, a
17domesticating company shall deliver to the Secretary of State
18for filing articles of domestication, which must include:
19        (1) a statement, as the case may be, that the company
20    has been domesticated from or into another jurisdiction;
21        (2) the name of the domesticating company and the
22    jurisdiction of its governing statute;
23        (3) the name of the domesticated company and the
24    jurisdiction of its governing statute;
25        (4) the date the domestication is effective under the

 

 

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1    governing statute of the domesticated company;
2        (5) if the domesticating company was a limited
3    liability company, a statement that the domestication was
4    approved as required by this Act;
5        (6) if the domesticating company was a foreign limited
6    liability company, a statement that the domestication was
7    approved as required by the governing statute of the other
8    jurisdiction;
9        (7) if the domesticated company was a foreign limited
10    liability company not authorized to transact business in
11    this State, the street and mailing addresses of an office
12    that the Secretary of State may use for the purposes of
13    subsection (b) of Section 37-34; and
14        (8) if the domesticated company was a foreign limited
15    liability company, the company's articles of organization.
16    (b) A domestication becomes effective:
17        (1) when the articles of organization take effect, if
18    the domesticated company is a limited liability company;
19    and
20        (2) according to the governing statute of the
21    domesticated company, if the domesticated organization is
22    a foreign limited liability company.
 
23    (805 ILCS 180/37-34 new)
24    Sec. 37-34. Effect of domestication.
25    (a) When a domestication takes effect:

 

 

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1        (1) the domesticated company is for all purposes the
2    company that existed before the domestication;
3        (2) all property owned by the domesticating company
4    remains vested in the domesticated company;
5        (3) all debts, obligations, or other liabilities of the
6    domesticating company continue as debts, obligations, or
7    other liabilities of the domesticated company;
8        (4) an action or proceeding pending by or against a
9    domesticating company may be continued as if the
10    domestication had not occurred;
11        (5) except as prohibited by other law, all of the
12    rights, privileges, immunities, powers, and purposes of
13    the domesticating company remain vested in the
14    domesticated company;
15        (6) except as otherwise provided in the plan of
16    domestication, the terms and conditions of the plan of
17    domestication take effect; and
18        (7) except as otherwise agreed, the domestication does
19    not dissolve a domesticating limited liability company for
20    the purposes of Article 35.
21    (b) A domesticated company that is a foreign limited
22liability company consents to the jurisdiction of the courts of
23this State to enforce any debt, obligation, or other liability
24owed by the domesticating company, if, before the
25domestication, the domesticating company was subject to suit in
26this State on the debt, obligation, or other liability. A

 

 

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1domesticated company that is a foreign limited liability
2company and not authorized to transact business in this State
3appoints the Secretary of State as its agent for service of
4process for purposes of enforcing a debt, obligation, or other
5liability under this subsection. Service on the Secretary of
6State under this subsection must be made in the same manner and
7has the same consequences as in subsections (b) and (c) of
8Section 1-50.
9    (c) If a limited liability company has adopted and approved
10a plan of domestication under Section 37-32 providing for the
11company to be domesticated in a foreign jurisdiction, a
12statement surrendering the company's articles of organization
13must be delivered to the Secretary of State for filing setting
14forth:
15        (1) the name of the company;
16        (2) a statement that the articles of organization are
17    being surrendered in connection with the domestication of
18    the company in a foreign jurisdiction;
19        (3) a statement that the domestication was approved as
20    required by this Act; and
21        (4) the jurisdiction of formation of the domesticated
22    foreign limited liability company.
23    (d) A domesticated company that is a foreign limited
24liability company may not do business in this State until an
25application for that authority is filed with the Secretary of
26State.
 

 

 

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1    (805 ILCS 180/37-36 new)
2    Sec. 37-36. Restrictions on approval of mergers and
3conversions.
4    (a) If a member of a merging or converting limited
5liability company will have personal liability with respect to
6a surviving or converted organization, approval or amendment of
7a plan of merger or conversion is ineffective without the
8consent of the member, unless:
9        (1) the company's operating agreement provides for
10    approval of a merger or conversion with the consent of
11    fewer than all the members; and
12        (2) the member has consented to the provision of the
13    operating agreement.
14    (b) A member does not give the consent required by
15subsection (a) merely by consenting to a provision of the
16operating agreement that permits the operating agreement to be
17amended with the consent of fewer than all the members.
 
18    (805 ILCS 180/37-40)
19    Sec. 37-40. Series of members, managers or limited
20liability company interests.
21    (a) An operating agreement may establish or provide for the
22establishment of designated series of members, managers or
23limited liability company interests having separate rights,
24powers or duties with respect to specified property or

 

 

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1obligations of the limited liability company or profits and
2losses associated with specified property or obligations, and
3to the extent provided in the operating agreement, any such
4series may have a separate business purpose or investment
5objective.
6    (b) Notwithstanding anything to the contrary set forth in
7this Section or under other applicable law, in the event that
8an operating agreement creates one or more series, and if
9separate and distinct records are maintained for any such
10series and the assets associated with any such series are held
11(directly or indirectly, including through a nominee or
12otherwise) and accounted for separately from the other assets
13of the limited liability company, or any other series thereof,
14and if the operating agreement so provides, and notice of the
15limitation on liabilities of a series as referenced in this
16subsection is set forth in the articles of organization of the
17limited liability company and if the limited liability company
18has filed a certificate of designation for each series which is
19to have limited liability under this Section, then the debts,
20liabilities and obligations incurred, contracted for or
21otherwise existing with respect to a particular series shall be
22enforceable against the assets of such series only, and not
23against the assets of the limited liability company generally
24or any other series thereof, and unless otherwise provided in
25the operating agreement, none of the debts, liabilities,
26obligations and expenses incurred, contracted for or otherwise

 

 

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1existing with respect to the limited liability company
2generally or any other series thereof shall be enforceable
3against the assets of such series. The fact that the articles
4of organization contain the foregoing notice of the limitation
5on liabilities of a series and a certificate of designation for
6a series is on file in the Office of the Secretary of State
7shall constitute notice of such limitation on liabilities of a
8series. A series with limited liability shall be treated as a
9separate entity to the extent set forth in the articles of
10organization. Each series with limited liability may, in its
11own name, contract, hold title to assets, grant security
12interests, sue and be sued and otherwise conduct business and
13exercise the powers of a limited liability company under this
14Act. The limited liability company and any of its series may
15elect to consolidate their operations as a single taxpayer to
16the extent permitted under applicable law, elect to work
17cooperatively, elect to contract jointly or elect to be treated
18as a single business for purposes of qualification to do
19business in this or any other state. Such elections shall not
20affect the limitation of liability set forth in this Section
21except to the extent that the series have specifically accepted
22joint liability by contract.
23    (c) Except in the case of a foreign limited liability
24company that has adopted an assumed name pursuant to Section
2545-15, the name of the series with limited liability must
26commence with the entire name of the limited liability company,

 

 

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1as set forth in its articles of organization incorporation, and
2be distinguishable from the names of the other series set forth
3in the articles of organization. In the case of a foreign
4limited liability company that has adopted an assumed name
5pursuant to Section 45-15, the name of the series with limited
6liability must commence with the entire name, as set forth in
7the foreign limited liability company's assumed name
8application, under which the foreign limited liability company
9has been admitted to transact business in this State.
10    (d) Upon the filing of the certificate of designation with
11the Secretary of State setting forth the name of each series
12with limited liability, the series' existence shall begin, and
13each of the duplicate copies stamped "Filed" and marked with
14the filing date shall be conclusive evidence, except as against
15the State, that all conditions precedent required to be
16performed have been complied with and that the series has been
17or shall be legally organized and formed under this Act. If
18different from the limited liability company, the certificate
19of designation for each series shall list the name and business
20address of all names of the members if the series is member
21managed or the names of the managers and any member having the
22authority of a if the series is manager managed. The name of a
23series with limited liability under subsection (b) of this
24Section may be changed by filing with the Secretary of State a
25certificate of designation identifying the series whose name is
26being changed and the new name of such series. If not the same

 

 

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1as the limited liability company, the name and business address
2of all names of the members of a member managed series or of
3the managers and any member having the authority of a manager
4managed series may be changed by filing a new certificate of
5designation with the Secretary of State. A series with limited
6liability under subsection (b) of this Section may be dissolved
7by filing with the Secretary of State a certificate of
8designation identifying the series being dissolved or by the
9dissolution of the limited liability company as provided in
10subsection (m) of this Section. Certificates of designation may
11be executed by the limited liability company or any manager,
12person or entity designated in the operating agreement for the
13limited liability company.
14    (e) A series of a limited liability company will be deemed
15to be in good standing as long as the limited liability company
16is in good standing.
17    (f) The registered agent and registered office for the
18limited liability company in Illinois shall serve as the agent
19and office for service of process in Illinois for each series.
20    (g) An operating agreement may provide for classes or
21groups of members or managers associated with a series having
22such relative rights, powers and duties as the operating
23agreement may provide, and may make provision for the future
24creation of additional classes or groups of members or managers
25associated with the series having such relative rights, powers
26and duties as may from time to time be established, including

 

 

HB4361- 100 -LRB099 15485 KTG 39774 b

1rights, powers and duties senior to existing classes and groups
2of members or managers associated with the series.
3    (h) A series may be managed by either the member or members
4associated with the series or by a manager or managers chosen
5by the members of such series, as provided in the operating
6agreement. Unless otherwise provided in an operating
7agreement, the management of a series shall be vested in the
8members associated with such series.
9    (i) An operating agreement may grant to all or certain
10identified members or managers or a specified class or group of
11the members or managers associated with a series the right to
12vote separately or with all or any class or group of the
13members or managers associated with the series, on any matter.
14An operating agreement may provide that any member or class or
15group of members associated with a series shall have no voting
16rights.
17    (j) Except to the extent modified in this Section, the
18provisions of this Act which are generally applicable to
19limited liability companies, their managers, members and
20transferees shall be applicable to each particular series with
21respect to the operation of such series.
22    (k) Except as otherwise provided in an operating agreement,
23any event under this Act or in an operating agreement that
24causes a manager to cease to be a manager with respect to a
25series shall not, in itself, cause such manager to cease to be
26a manager of the limited liability company or with respect to

 

 

HB4361- 101 -LRB099 15485 KTG 39774 b

1any other series thereof.
2    (l) Except as otherwise provided in an operating agreement,
3any event under this Act or an operating agreement that causes
4a member to cease to be associated with a series shall not, in
5itself, cause such member to cease to be associated with any
6other series or terminate the continued membership of a member
7in the limited liability company or cause the termination of
8the series, regardless of whether such member was the last
9remaining member associated with such series.
10    (m) Except to the extent otherwise provided in the
11operating agreement, a series may be dissolved and its affairs
12wound up without causing the dissolution of the limited
13liability company. The dissolution of a series established in
14accordance with subsection (b) of this Section shall not affect
15the limitation on liabilities of such series provided by
16subsection (b) of this Section. A series is terminated and its
17affairs shall be wound up upon the dissolution of the limited
18liability company under Article 35 of this Act.
19    (n) If a limited liability company with the ability to
20establish series does not register to do business in a foreign
21jurisdiction for itself and certain of its series, a series of
22a limited liability company may itself register to do business
23as a limited liability company in the foreign jurisdiction in
24accordance with the laws of the foreign jurisdiction.
25    (o) If a foreign limited liability company, as permitted in
26the jurisdiction of its organization, has established a series

 

 

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1having separate rights, powers or duties and has limited the
2liabilities of such series so that the debts, liabilities and
3obligations incurred, contracted for or otherwise existing
4with respect to a particular series are enforceable against the
5assets of such series only, and not against the assets of the
6limited liability company generally or any other series
7thereof, or so that the debts, liabilities, obligations and
8expenses incurred, contracted for or otherwise existing with
9respect to the limited liability company generally or any other
10series thereof are not enforceable against the assets of such
11series, then the limited liability company, on behalf of itself
12or any of its series, or any of its series on their own behalf
13may register to do business in the State in accordance with
14Section 45-5 of this Act. The limitation of liability shall be
15so stated on the application for admission as a foreign limited
16liability company and a certificate of designation shall be
17filed for each series being registered to do business in the
18State by the limited liability company. Unless otherwise
19provided in the operating agreement, the debts, liabilities and
20obligations incurred, contracted for or otherwise existing
21with respect to a particular series of such a foreign limited
22liability company shall be enforceable against the assets of
23such series only, and not against the assets of the foreign
24limited liability company generally or any other series thereof
25and none of the debts, liabilities, obligations and expenses
26incurred, contracted for or otherwise existing with respect to

 

 

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1such a foreign limited liability company generally or any other
2series thereof shall be enforceable against the assets of such
3series.
4(Source: P.A. 98-720, eff. 7-16-14.)
 
5    (805 ILCS 180/50-1)
6    Sec. 50-1. Annual reports.
7    (a) Each limited liability company organized under the laws
8of this State and each foreign limited liability company
9admitted to transact business in this State shall file, within
10the time prescribed by this Act, an annual report setting forth
11all of the following:
12        (1) The name of the limited liability company.
13        (2) The address, including street and number or rural
14    route number, of its registered office in this State and
15    the name of its registered agent at that address.
16        (3) The address, including street and number or rural
17    route number of its principal place of business.
18        (4) The name names and business address addresses of
19    all of the its managers and any member having the authority
20    of a manager or, if none, the members.
21        (5) Additional information that may be necessary or
22    appropriate in order to enable the Secretary of State to
23    administer this Act and to verify the proper amount of fees
24    payable by the limited liability company.
25        (6) The annual report shall be made on forms prescribed

 

 

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1    and furnished by the Secretary of State, and the
2    information therein, required by paragraphs (1) through
3    (4) of subsection (a), both inclusive, shall be given as of
4    the date of execution of the annual report. The annual
5    report shall be executed by a manager or, if none, a member
6    designated by the members pursuant to limited liability
7    company action properly taken under Section 15-1.
8    (b) The annual report, together with all fees and charges
9prescribed by this Act, shall be delivered to the Secretary of
10State within 60 days immediately preceding the first day of the
11anniversary month. Proof to the satisfaction of the Secretary
12of State that, before the first day of the anniversary month of
13the limited liability company, the report, together with all
14fees and charges as prescribed by this Act, was deposited in
15the United States mail in a sealed envelope, properly
16addressed, with postage prepaid, shall be deemed a compliance
17with this requirement. If the Secretary of State finds that the
18report conforms to the requirements of this Act, he or she
19shall file it. If the Secretary of State finds that it does not
20so conform, he or she shall promptly return it to the limited
21liability company for any necessary corrections, in which event
22the penalties prescribed for failure to file the report within
23the time provided shall not apply if the report is corrected to
24conform to the requirements of this Act and returned to the
25Secretary of State within 60 days of the original due date of
26the report.

 

 

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1(Source: P.A. 90-424, eff. 1-1-98; 91-354, eff. 1-1-00.)
 
2    (805 ILCS 180/50-10)
3    Sec. 50-10. Fees.
4    (a) The Secretary of State shall charge and collect in
5accordance with the provisions of this Act and rules
6promulgated under its authority all of the following:
7        (1) Fees for filing documents.
8        (2) Miscellaneous charges.
9        (3) Fees for the sale of lists of filings and for
10    copies of any documents.
11    (b) The Secretary of State shall charge and collect for all
12of the following:
13        (1) Filing articles of organization (domestic),
14    application for admission (foreign), and restated articles
15    of organization (domestic), $500. Notwithstanding the
16    foregoing, the fee for filing articles of organization
17    (domestic), application for admission (foreign), and
18    restated articles of organization (domestic) in connection
19    with a limited liability company with a series or the
20    ability to establish a series pursuant to Section 37-40 of
21    this Act is $750.
22        (2) Filing amendments (domestic or foreign) articles
23    of amendment or an amended application for admission, $150.
24        (3) Filing a statement of termination articles of
25    dissolution or application for withdrawal, $25 $100.

 

 

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1        (4) Filing an application to reserve a name, $300.
2        (5) Filing a notice of cancellation of a reserved name,
3    $100.
4        (6) Filing a notice of a transfer of a reserved name,
5    $100.
6        (7) Registration of a name, $300.
7        (8) Renewal of registration of a name, $100.
8        (9) Filing an application for use of an assumed name
9    under Section 1-20 of this Act, $150 for each year or part
10    thereof ending in 0 or 5, $120 for each year or part
11    thereof ending in 1 or 6, $90 for each year or part thereof
12    ending in 2 or 7, $60 for each year or part thereof ending
13    in 3 or 8, $30 for each year or part thereof ending in 4 or
14    9, and a renewal for each assumed name, $150.
15        (10) Filing an application for change or cancellation
16    of an assumed name, $100.
17        (11) Filing an annual report of a limited liability
18    company or foreign limited liability company, $250, if
19    filed as required by this Act, plus a penalty if
20    delinquent. Notwithstanding the foregoing, the fee for
21    filing an annual report of a limited liability company or
22    foreign limited liability company with ability to
23    establish series is $250 plus $50 for each series for which
24    a certificate of designation has been filed pursuant to
25    Section 37-40 of this Act and is in effect active on the
26    last day of the third month preceding the company's

 

 

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1    anniversary month, plus a penalty if delinquent.
2        (12) Filing an application for reinstatement of a
3    limited liability company or foreign limited liability
4    company $500.
5        (13) Filing articles Articles of merger Merger, $100
6    plus $50 for each party to the merger in excess of the
7    first 2 parties.
8        (14) Filing articles of conversion an Agreement of
9    Conversion or Statement of Conversion, $100.
10        (15) Filing a statement of change of address of
11    registered office or change of registered agent, or both,
12    or filing a statement of correction, $25.
13        (16) Filing a petition for refund, $15.
14        (17) Filing a certificate of designation of a limited
15    liability company with a series pursuant to Section 37-40
16    of this Act, $50.
17        (18) Filing articles of domestication, $100.
18        (19) Filing, amending, or cancelling a statement of
19    authority, $50.
20        (20) Filing, amending, or cancelling a statement of
21    denial, $10.
22        (21) (17) Filing any other document, $100.
23        (18) Filing a certificate of designation of a limited
24    liability company with the ability to establish series
25    pursuant to Section 37-40 of this Act, $50.
26    (c) The Secretary of State shall charge and collect all of

 

 

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1the following:
2        (1) For furnishing a copy or certified copy of any
3    document, instrument, or paper relating to a limited
4    liability company or foreign limited liability company, or
5    for a certificate, $25.
6        (2) For the transfer of information by computer process
7    media to any purchaser, fees established by rule.
8(Source: P.A. 97-839, eff. 7-20-12.)
 
9    (805 ILCS 180/55-1)
10    Sec. 55-1. Construction and application.
11    (a) This Act shall be so applied and construed to
12effectuate its general purpose.
13    (b) Subject to subsection (b) of Section 15-5, it is the
14policy of this Act to give maximum effect to the principles of
15freedom of contract and to the enforceability of operating
16agreements.
17    (c) Rules that statutes in derogation of the common law are
18to be strictly construed shall have no application to this Act.
19    (d) Unless the context otherwise requires, as used in this
20Act, the singular shall include the plural and the plural shall
21include the singular. The use of any gender shall be applicable
22to all genders. The captions contained in this Act are for
23purposes of convenience only and shall not control or affect
24the construction of this Act.
25(Source: P.A. 87-1062.)
 

 

 

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1    (805 ILCS 180/55-3 new)
2    Sec. 55-3. Relation to Electronic Signatures in Global and
3National Commerce Act. This Act modifies, limits, and
4supersedes the federal Electronic Signatures in Global and
5National Commerce Act, 15 U.S.C. Section 7001 et seq., but does
6not modify, limit, or supersede Section 101(c) of that Act, 15
7U.S.C. Section 7001(c), or authorize electronic delivery of any
8of the notices described in Section 103(b) of that Act, 15
9U.S.C. Section 7003(b).
 
10    (805 ILCS 180/35-60 rep.)
11    (805 ILCS 180/35-65 rep.)
12    (805 ILCS 180/35-70 rep.)
13    Section 10. The Limited Liability Company Act is amended by
14repealing Sections 35-60, 35-65, and 35-70.
 
15    Section 99. Effective date. This Act takes effect July 1,
162017.

 

 

HB4361- 110 -LRB099 15485 KTG 39774 b

1 INDEX
2 Statutes amended in order of appearance
3    805 ILCS 180/1-5
4    805 ILCS 180/1-6 new
5    805 ILCS 180/1-30
6    805 ILCS 180/1-40
7    805 ILCS 180/1-46 new
8    805 ILCS 180/1-65 new
9    805 ILCS 180/5-5
10    805 ILCS 180/5-45
11    805 ILCS 180/5-47
12    805 ILCS 180/5-50
13    805 ILCS 180/10-1
14    805 ILCS 180/10-15
15    805 ILCS 180/13-5
16    805 ILCS 180/13-15 new
17    805 ILCS 180/13-20 new
18    805 ILCS 180/15-1
19    805 ILCS 180/15-3
20    805 ILCS 180/15-5
21    805 ILCS 180/15-7
22    805 ILCS 180/20-1
23    805 ILCS 180/20-5
24    805 ILCS 180/25-35

 

 

HB4361- 111 -LRB099 15485 KTG 39774 b

1    805 ILCS 180/Art. 30
2    heading
3    805 ILCS 180/30-5
4    805 ILCS 180/30-10
5    805 ILCS 180/30-20
6    805 ILCS 180/30-25 new
7    805 ILCS 180/35-1
8    805 ILCS 180/35-3
9    805 ILCS 180/35-4
10    805 ILCS 180/35-7
11    805 ILCS 180/35-15
12    805 ILCS 180/35-20
13    805 ILCS 180/35-37 new
14    805 ILCS 180/35-45
15    805 ILCS 180/35-55
16    805 ILCS 180/Art. 37
17    heading
18    805 ILCS 180/37-5
19    805 ILCS 180/37-10
20    805 ILCS 180/37-15
21    805 ILCS 180/37-16 new
22    805 ILCS 180/37-17 new
23    805 ILCS 180/37-20
24    805 ILCS 180/37-21 new
25    805 ILCS 180/37-25
26    805 ILCS 180/37-30

 

 

HB4361- 112 -LRB099 15485 KTG 39774 b

1    805 ILCS 180/37-31 new
2    805 ILCS 180/37-32 new
3    805 ILCS 180/37-33 new
4    805 ILCS 180/37-34 new
5    805 ILCS 180/37-36 new
6    805 ILCS 180/37-40
7    805 ILCS 180/50-1
8    805 ILCS 180/50-10
9    805 ILCS 180/55-1
10    805 ILCS 180/55-3 new
11    805 ILCS 180/35-60 rep.
12    805 ILCS 180/35-65 rep.
13    805 ILCS 180/35-70 rep.