99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB4449

 

Introduced , by Rep. Emanuel Chris Welch

 

SYNOPSIS AS INTRODUCED:
 
805 ILCS 5/1.10  from Ch. 32, par. 1.10
805 ILCS 105/101.10  from Ch. 32, par. 101.10
805 ILCS 105/112.35  from Ch. 32, par. 112.35
805 ILCS 105/112.40  from Ch. 32, par. 112.40
805 ILCS 180/35-25
805 ILCS 180/37-40

    Amends the Business Corporation Act of 1983 and the General Not For Profit Corporation Act of 1986. Requires the president, vice-president, secretary, assistant secretary, treasurer, or other officer duly authorized by a corporation's board of directors to execute and verify (rather than execute) certain documents required to be filed in the office of the Secretary of State. In regard to corporations organized under the General Not For Profit Corporation Act of 1986, provides that the Secretary of State may dissolve any corporation administratively if it has failed to elect and maintain at least 3 directors. Provides that failure to receive a notice of administrative dissolution shall not relieve a corporation of its obligation to pay the filing fee and any penalties due or invalidate the validity thereof. Amends the Limited Liability Company Act. Provides that the Secretary of State may dissolve any limited liability company administratively if it has failed to appoint and maintain a registered agent in Illinois (rather than if it has failed to appoint and maintain a registered agent in Illinois within 60 days after a registered agent's notice of resignation). Provides that the name of a series with limited liability must commence with the entire name of the limited liability company, as set forth in its articles of organization (rather than articles of incorporation) and be distinguishable from the names of the other series set forth in the articles of organization. Effective July 1, 2016.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4449LRB099 16147 KTG 40473 b

1    AN ACT concerning business organizations.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Business Corporation Act of 1983 is amended
5by changing Section 1.10 as follows:
 
6    (805 ILCS 5/1.10)  (from Ch. 32, par. 1.10)
7    Sec. 1.10. Forms, execution, acknowledgment and filing.
8    (a) All reports required by this Act to be filed in the
9office of the Secretary of State shall be made on forms which
10shall be prescribed and furnished by the Secretary of State.
11Forms for all other documents to be filed in the office of the
12Secretary of State shall be furnished by the Secretary of State
13on request therefor, but the use thereof, unless otherwise
14specifically prescribed in this Act, shall not be mandatory.
15    (b) Whenever any provision of this Act specifically
16requires any document to be executed by the corporation in
17accordance with this Section, unless otherwise specifically
18stated in this Act and subject to any additional provisions of
19this Act, such document shall be executed, in ink, as follows:
20        (1) The articles of incorporation, and any other
21    document to be filed before the election of the initial
22    board of directors if the initial directors were not named
23    in the articles of incorporation, shall be signed by the

 

 

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1    incorporator or incorporators.
2        (2) All other documents shall be signed:
3            (i) By the president, a vice-president, the
4        secretary, an assistant secretary, the treasurer, or
5        other officer duly authorized by the board of directors
6        of the corporation to execute the document and verified
7        by him or her; or
8            (ii) If it shall appear from the document that
9        there are no such officers, then by a majority of the
10        directors or by such directors as may be designated by
11        the board; or
12            (iii) If it shall appear from the document that
13        there are no such officers or directors, then by the
14        holders of record, or such of them as may be designated
15        by the holders of record of a majority of all
16        outstanding shares; or
17            (iv) By the holders of all outstanding shares; or
18            (v) If the corporate assets are in the possession
19        of a receiver, trustee or other court appointed
20        officer, then by the fiduciary or the majority of them
21        if there are more than one.
22    (c) The name of a person signing the document and the
23capacity in which he or she signs shall be stated beneath or
24opposite his or her signature.
25    (d) Whenever any provision of this Act requires any
26document to be verified, such requirement is satisfied by

 

 

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1either:
2        (1) The formal acknowledgment by the person or one of
3    the persons signing the instrument that it is his or her
4    act and deed or the act and deed of the corporation, as the
5    case may be, and that the facts stated therein are true.
6    Such acknowledgment shall be made before a person who is
7    authorized by the law of the place of execution to take
8    acknowledgments of deeds and who, if he or she has a seal
9    of office, shall affix it to the instrument.
10        (2) The signature, without more, of the person or
11    persons signing the instrument, in which case such
12    signature or signatures shall constitute the affirmation
13    or acknowledgment of the signatory, under penalties of
14    perjury, that the instrument is his or her act and deed or
15    the act and deed of the corporation, as the case may be,
16    and that the facts stated therein are true.
17    (e) Whenever any provision of this Act requires any
18document to be filed with the Secretary of State or in
19accordance with this Section, such requirement means that:
20        (1) The original signed document, and if in duplicate
21    as provided by this Act, one true copy, which may be
22    signed, carbon or photocopy, shall be delivered to the
23    office of the Secretary of State.
24        (2) All fees, taxes and charges authorized by law to be
25    collected by the Secretary of State in connection with the
26    filing of the document shall be tendered to the Secretary

 

 

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1    of State.
2        (3) If the Secretary of State finds that the document
3    conforms to law, he or she shall, when all fees, taxes and
4    charges have been paid as in this Act prescribed:
5            (i) Endorse on the original and on the true copy,
6        if any, the word "filed" and the month, day and year
7        thereof;
8            (ii) File the original in his or her office;
9            (iii) (Blank); or
10            (iv) If the filing is in duplicate, he or she shall
11        return one true copy to the corporation or its
12        representative.
13    (f) If another Section of this Act specifically prescribes
14a manner of filing or executing a specified document which
15differs from the corresponding provisions of this Section, then
16the provisions of such other Section shall govern.
17(Source: P.A. 96-1121, eff. 1-1-11.)
 
18    Section 10. The General Not For Profit Corporation Act of
191986 is amended by changing Sections 101.10, 112.35, and 112.40
20as follows:
 
21    (805 ILCS 105/101.10)  (from Ch. 32, par. 101.10)
22    Sec. 101.10. Forms, execution, acknowledgment and filing.
23    (a) All reports required by this Act to be filed in the
24office of the Secretary of State shall be made on forms which

 

 

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1shall be prescribed and furnished by the Secretary of State.
2Forms for all other documents to be filed in the office of the
3Secretary of State shall be furnished by the Secretary of State
4on request therefor, but the use thereof, unless otherwise
5specifically prescribed in this Act, shall not be mandatory.
6    (b) Whenever any provision of this Act specifically
7requires any document to be executed by the corporation in
8accordance with this Section, unless otherwise specifically
9stated in this Act and subject to any additional provisions of
10this Act, such document shall be executed, in ink, as follows:
11        (1) The articles of incorporation shall be signed by
12    the incorporator or incorporators.
13        (2) All other documents shall be signed:
14            (i) By the president, a vice-president, the
15        secretary, an assistant secretary, the treasurer, or
16        other officer duly authorized by the board of directors
17        of the corporation to execute the document and verified
18        by him or her; or
19            (ii) If it shall appear from the document that
20        there are no such officers, then by a majority of the
21        directors or by such directors as may be designated by
22        the board; or
23            (iii) If it shall appear from the document that
24        there are no such officers or directors, then by the
25        members, or such of them as may be designated by the
26        members at a lawful meeting; or

 

 

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1            (iv) If the corporate assets are in the possession
2        of a receiver, trustee or other court-appointed
3        officer, then by the fiduciary or the majority of them
4        if there are more than one.
5    (c) The name of a person signing the document and the
6capacity in which he or she signs shall be stated beneath or
7opposite his or her signature.
8    (d) Whenever any provision of this Act requires any
9document to be verified, such requirement is satisfied by
10either:
11        (1) The formal acknowledgment by the person or one of
12    the persons signing the instrument that it is his or her
13    act and deed or the act and deed of the corporation, as the
14    case may be, and that the facts stated therein are true.
15    Such acknowledgment shall be made before a person who is
16    authorized by the law of the place of execution to take
17    acknowledgments of deeds and who, if he or she has a seal
18    of office, shall affix it to the instrument; or
19        (2) The signature, without more, of the person or
20    persons signing the instrument, in which case such
21    signature or signatures shall constitute the affirmation
22    or acknowledgment of the signatory, under penalties of
23    perjury, that the instrument is his or her act and deed or
24    the act and deed of the corporation, as the case may be,
25    and that the facts stated therein are true.
26    (e) Whenever any provision of this Act requires any

 

 

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1document to be filed with the Secretary of State or in
2accordance with this Section, such requirement means that:
3        (1) The original signed document, and if in duplicate
4    as provided by this Act, one true copy, which may be
5    signed, or carbon or photocopy shall be delivered to the
6    office of the Secretary of State.
7        (2) All fees and charges authorized by law to be
8    collected by the Secretary of State in connection with the
9    filing of the document shall be tendered to the Secretary
10    of State.
11        (3) If the Secretary of State finds that the document
12    conforms to law, he or she shall, when all fees and charges
13    have been paid as in this Act prescribed:
14            (i) Endorse on the original and on the true copy,
15        if any, the word "filed" and the month, day and year
16        thereof;
17            (ii) File the original in his or her office;
18            (iii) (Blank); and
19            (iv) If the filing is in duplicate, he or she shall
20        return the copy to the corporation or its
21        representative.
22    (f) If another Section of this Act specifically prescribes
23a manner of filing or executing a specified document which
24differs from the corresponding provisions of this Section, then
25the provisions of such other Section shall govern.
26(Source: P.A. 96-1121, eff. 1-1-11.)
 

 

 

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1    (805 ILCS 105/112.35)  (from Ch. 32, par. 112.35)
2    Sec. 112.35. Grounds for administrative dissolution. The
3Secretary of State may dissolve any corporation
4administratively if:
5    (a) It has failed to file its annual report as required by
6this Act before the first day of the anniversary month of the
7corporation of the year in which such annual report becomes
8due;
9    (b) It has failed to file in the office of the Secretary of
10State any report after the expiration of the period prescribed
11in this Act for filing such report;
12    (c) It has failed to pay any fees or charges prescribed by
13this Act;
14    (d) It has failed to appoint and maintain a registered
15agent in this State;
16    (e) It has misrepresented any material matter in any
17application, report, affidavit, or other document filed by the
18corporation pursuant to this Act; or
19    (f) The Secretary of State receives notification from a
20local liquor commissioner, pursuant to Section 4-4(3) of "The
21Liquor Control Act of 1934," as now or hereafter amended, that
22an organization incorporated under this Act and functioning as
23a club has violated that Act by selling or offering for sale at
24retail alcoholic liquors without a retailer's license; or .
25    (g) It has failed to elect and maintain at least 3

 

 

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1directors in accordance with Section 108.10 of this Act.
2(Source: P.A. 92-33, eff. 7-1-01.)
 
3    (805 ILCS 105/112.40)  (from Ch. 32, par. 112.40)
4    Sec. 112.40. Procedure for administrative dissolution.
5    (a) After the Secretary of State determines that one or
6more grounds exist under Section 112.35 of this Act for the
7administrative dissolution of a corporation, he or she shall
8send by regular mail to each delinquent corporation a Notice of
9Delinquency to its registered office, or, if the corporation
10has failed to maintain a registered office, then to the
11president or other principal officer at the last known office
12of said officer. Failure to receive such notice shall not
13relieve the corporation of its obligation to pay the filing fee
14and any penalties due or invalidate the validity thereof.
15    (b) If the corporation does not correct the default within
1690 days following such notice, the Secretary of State shall
17thereupon dissolve the corporation by issuing a certificate of
18dissolution that recites the ground or grounds for dissolution
19and its effective date. The Secretary of State shall file the
20original of the certificate in his or her office and mail one
21copy to the corporation at its registered office or, if the
22corporation has failed to maintain a registered office, then to
23the president or other principal officer at the last known
24office of said officer.
25    (c) The administrative dissolution of a corporation

 

 

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1terminates its corporate existence and such a dissolved
2corporation shall not thereafter carry on any affairs, provided
3however, that such a dissolved corporation may take all action
4authorized under Section 112.75 of this Act or as otherwise
5necessary or appropriate to wind up and liquidate its affairs
6under Section 112.30 of this Act.
7(Source: P.A. 98-776, eff. 1-1-15.)
 
8    Section 15. The Limited Liability Company Act is amended by
9changing Sections 35-25 and 37-40 as follows:
 
10    (805 ILCS 180/35-25)
11    Sec. 35-25. Grounds for administrative dissolution. The
12Secretary of State may dissolve any limited liability company
13administratively if:
14        (1) it has failed to file its annual report and pay its
15    fee as required by this Act before the first day of the
16    anniversary month or has failed to pay any fees, penalties,
17    or charges required by this Act;
18        (2) it has failed to file in the Office of the
19    Secretary of State any report after the expiration of the
20    period prescribed in this Act for filing the report;
21        (2.5) it has misrepresented any material matter in any
22    application, report, affidavit, or other document
23    submitted by the limited liability company under this Act;
24        (3) it has failed to appoint and maintain a registered

 

 

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1    agent in Illinois in accordance with the provisions of this
2    Act within 60 days after a registered agent's notice of
3    resignation under Section 1-35;
4        (4) a manager or member to whom interrogatories have
5    been propounded by the Secretary of State as provided in
6    Section 5-60 of this Act fails to answer the
7    interrogatories fully and to timely file the answer in the
8    office of the Secretary of State; or
9        (5) it has tendered payment to the Secretary of State
10    which is returned due to insufficient funds, a closed
11    account, or for any other reason, and acceptable payment
12    has not been subsequently tendered.
13(Source: P.A. 98-171, eff. 8-5-13.)
 
14    (805 ILCS 180/37-40)
15    Sec. 37-40. Series of members, managers or limited
16liability company interests.
17    (a) An operating agreement may establish or provide for the
18establishment of designated series of members, managers or
19limited liability company interests having separate rights,
20powers or duties with respect to specified property or
21obligations of the limited liability company or profits and
22losses associated with specified property or obligations, and
23to the extent provided in the operating agreement, any such
24series may have a separate business purpose or investment
25objective.

 

 

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

 

 

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1a series is on file in the Office of the Secretary of State
2shall constitute notice of such limitation on liabilities of a
3series. A series with limited liability shall be treated as a
4separate entity to the extent set forth in the articles of
5organization. Each series with limited liability may, in its
6own name, contract, hold title to assets, grant security
7interests, sue and be sued and otherwise conduct business and
8exercise the powers of a limited liability company under this
9Act. The limited liability company and any of its series may
10elect to consolidate their operations as a single taxpayer to
11the extent permitted under applicable law, elect to work
12cooperatively, elect to contract jointly or elect to be treated
13as a single business for purposes of qualification to do
14business in this or any other state. Such elections shall not
15affect the limitation of liability set forth in this Section
16except to the extent that the series have specifically accepted
17joint liability by contract.
18    (c) Except in the case of a foreign limited liability
19company that has adopted an assumed name pursuant to Section
2045-15, the name of the series with limited liability must
21commence with the entire name of the limited liability company,
22as set forth in its articles of organization incorporation, and
23be distinguishable from the names of the other series set forth
24in the articles of organization. In the case of a foreign
25limited liability company that has adopted an assumed name
26pursuant to Section 45-15, the name of the series with limited

 

 

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

 

 

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

 

 

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

 

 

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1the series, regardless of whether such member was the last
2remaining member associated with such series.
3    (m) Except to the extent otherwise provided in the
4operating agreement, a series may be dissolved and its affairs
5wound up without causing the dissolution of the limited
6liability company. The dissolution of a series established in
7accordance with subsection (b) of this Section shall not affect
8the limitation on liabilities of such series provided by
9subsection (b) of this Section. A series is terminated and its
10affairs shall be wound up upon the dissolution of the limited
11liability company under Article 35 of this Act.
12    (n) If a limited liability company with the ability to
13establish series does not register to do business in a foreign
14jurisdiction for itself and certain of its series, a series of
15a limited liability company may itself register to do business
16as a limited liability company in the foreign jurisdiction in
17accordance with the laws of the foreign jurisdiction.
18    (o) If a foreign limited liability company, as permitted in
19the jurisdiction of its organization, has established a series
20having separate rights, powers or duties and has limited the
21liabilities of such series so that the debts, liabilities and
22obligations incurred, contracted for or otherwise existing
23with respect to a particular series are enforceable against the
24assets of such series only, and not against the assets of the
25limited liability company generally or any other series
26thereof, or so that the debts, liabilities, obligations and

 

 

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1expenses incurred, contracted for or otherwise existing with
2respect to the limited liability company generally or any other
3series thereof are not enforceable against the assets of such
4series, then the limited liability company, on behalf of itself
5or any of its series, or any of its series on their own behalf
6may register to do business in the State in accordance with
7Section 45-5 of this Act. The limitation of liability shall be
8so stated on the application for admission as a foreign limited
9liability company and a certificate of designation shall be
10filed for each series being registered to do business in the
11State by the limited liability company. Unless otherwise
12provided in the operating agreement, the debts, liabilities and
13obligations incurred, contracted for or otherwise existing
14with respect to a particular series of such a foreign limited
15liability company shall be enforceable against the assets of
16such series only, and not against the assets of the foreign
17limited liability company generally or any other series thereof
18and none of the debts, liabilities, obligations and expenses
19incurred, contracted for or otherwise existing with respect to
20such a foreign limited liability company generally or any other
21series thereof shall be enforceable against the assets of such
22series.
23(Source: P.A. 98-720, eff. 7-16-14.)
 
24    Section 99. Effective date. This Act takes effect July 1,
252016.