HB1336 Engrossed LRB096 10290 KTG 20460 b

1     AN ACT concerning business.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Limited Liability Company Act is amended by
5 changing Section 15-3 as follows:
 
6     (805 ILCS 180/15-3)
7     Sec. 15-3. General standards of member and manager's
8 conduct.
9     (a) The fiduciary duties a member owes to a member-managed
10 company and its other members include the duty of loyalty and
11 the duty of care referred to in subsections (b) and (c) of this
12 Section.
13     (b) A member's duty of loyalty to a member-managed company
14 and its other members includes the following:
15         (1) to account to the company and to hold as trustee
16     for it any property, profit, or benefit derived by the
17     member in the conduct or winding up of the company's
18     business or derived from a use by the member of the
19     company's property, including the appropriation of a
20     company's opportunity;
21         (2) to act fairly when a member deals with the company
22     in the conduct or winding up of the company's business as
23     or on behalf of a party having an interest adverse to the

 

 

HB1336 Engrossed - 2 - LRB096 10290 KTG 20460 b

1     company; and
2         (3) to refrain from competing with the company in the
3     conduct of the company's business before the dissolution of
4     the company.
5     (c) A member's duty of care to a member-managed company and
6 its other members in the conduct of and winding up of the
7 company's business is limited to refraining from engaging in
8 grossly negligent or reckless conduct, intentional misconduct,
9 or a knowing violation of law.
10     (d) A member shall discharge his or her duties to a
11 member-managed company and its other members under this Act or
12 under the operating agreement and exercise any rights
13 consistent with the obligation of good faith and fair dealing.
14     (e) A member of a member-managed company does not violate a
15 duty or obligation under this Act or under the operating
16 agreement merely because the member's conduct furthers the
17 member's own interest.
18     (f) This Section applies to a person winding up the limited
19 liability company's business as the personal or legal
20 representative of the last surviving member as if the person
21 were a member.
22     (g) In a manager-managed company:
23         (1) a member who is not also a manager owes no duties
24     to the company or to the other members solely by reason of
25     being a member;
26         (2) a manager is held to the same standards of conduct

 

 

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1     prescribed for members in subsections (b), (c), (d), and
2     (e) of this Section;
3         (3) a member who pursuant to the operating agreement
4     exercises some or all of the authority of a manager in the
5     management and conduct of the company's business is held to
6     the standards of conduct in subsections (b), (c), (d), and
7     (e) of this Section to the extent that the member exercises
8     the managerial authority vested in a manager by this Act;
9     and
10         (4) a manager is relieved of liability imposed by law
11     for violations of the standards prescribed by subsections
12     (b), (c), (d), and (e) to the extent of the managerial
13     authority delegated to the members by the operating
14     agreement.
15 (Source: P.A. 95-331, eff. 8-21-07.)