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(805
ILCS 180/Art. 35 heading)
Article 35. Dissolution and Dissociation
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(805
ILCS 180/35- 1)
Sec.
35- 1. Events causing dissolution and winding up of company's
business. A limited liability company is dissolved, and, unless
continued pursuant to subsection (b) of Section 35- 3, its
business must be wound up, upon the occurrence of any of the
following events:
(1)
An event specified in the operating agreement.
(2)
Consent of the number or percentage of members specified in the
operating agreement.
(3)
An event that makes it unlawful for all or substantially all
of the business of the company to be continued, but any cure
of illegality within 90 days after notice to the company of the
event is effective retroactively to the date of the event for
purposes of this Section.
(4)
On application by a member or a dissociated member, upon entry
of a judicial decree that:
(A)
the economic purpose of the company is likely to
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be
unreasonably frustrated;
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(B)
another member has engaged in conduct relating
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to
the company's business that makes it not reasonably
practicable to carry on the company's business with
that member;
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(C)
it is not otherwise reasonably practicable to
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carry
on the company's business in conformity with the
articles of organization and the operating agreement;
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(D)
the company failed to purchase the petitioner's
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distributional
interest as required by Section 35- 60; or
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(E)
the managers or members in control of the
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company
have acted, are acting, or will act in a manner that
is illegal, oppressive, or fraudulent with respect
to the petitioner.
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(5)
On application by a transferee of a member's interest, a
judicial determination that it is equitable to wind up the
company's business.
(6)
Administrative dissolution under Section 35- 25.
(Source: P.A.
90- 424, eff. 1- 1- 98.)
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(805
ILCS 180/35- 3)
Sec.
35- 3. Limited liability company continues after dissolution.
(a)
Subject to subsections (b) and (c) of this Section, a limited
liability company continues after dissolution only for the purpose
of winding up its business.
(b)
At any time after the dissolution of a limited liability company
and before the winding up of its business is completed, the members,
including a dissociated member whose dissociation caused the
dissolution, may unanimously waive the right to have the company's
business wound up and the company terminated. In that case:
(1)
the limited liability company resumes carrying
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on
its business as if dissolution had never occurred
and any liability incurred by the company or a member
after the dissolution and before the waiver is determined
as if the dissolution had never occurred; and
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(2)
the rights of a third party accruing under
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subsection
(a) of Section 35- 7 or arising out of conduct
in reliance on the dissolution before the third party
knew or received a notification of the waiver are
not adversely affected.
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(c)
Unless otherwise provided in the articles of organization
or the operating agreement, the limited liability company
is not dissolved and is not required to be wound up if:
(1)
within 6 months or such period as is provided
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for
in the articles of organization or the operating
agreement after the occurrence of the event that
caused the dissociation of the last remaining member,
the personal representative of the last remaining
member agrees in writing to continue the limited
liability company until the admission of the personal
representative of that member or its nominee or designee
to the limited liability company as a member, effective
as of the occurrence of the event that caused the
dissociation of the last remaining member, provided
that the articles of organization or the operating
agreement may provide that the personal representative
of the last remaining member shall be obligated to
agree in writing to continue the limited liability
company and to the admission of the personal representative
of that member or its nominee or designee to the
limited liability company as a member, effective
as of the occurrence of the event that caused the
dissociation of the last remaining member; or
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(2)
a member is admitted to the limited liability
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company
in the manner provided for in the articles of organization
or the operating agreement, effective as of the occurrence
of the event that caused the dissociation of the
last remaining member, within 6 months or such other
period as is provided for in the operating agreement
after the occurrence of the event that caused the
dissociation of the last remaining member, pursuant
to a provision of the articles of organization or
the operating agreement that specifically provides
for the admission of a member to the limited liability
company after there is no longer a remaining member
of the limited liability company.
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(Source:
P.A. 93- 59, eff. 7- 1- 03.)
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(805
ILCS 180/35- 4)
Sec.
35- 4. Right to wind up limited liability company's business.
(a)
After dissolution, a member who has not wrongfully dissociated
may participate in winding up a limited liability company's business,
but on application of any member, member's legal representative,
or transferee, the Circuit Court, for good cause shown, may order
judicial supervision of the winding up.
(b)
A legal representative of the last surviving member may wind
up a limited liability company's business.
(c)
A person winding up a limited liability company's business may
preserve the company's business or property as a going concern
for a reasonable time, prosecute and defend actions and proceedings,
whether civil, criminal, or administrative, settle and close
the company's business, dispose of and transfer the company's
property, discharge the company's liabilities, distribute the
assets of the company pursuant to Section 35- 10, settle
disputes by mediation or arbitration, and perform other necessary
acts.
(Source: P.A.
90- 424, eff. 1- 1- 98.)
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(805
ILCS 180/35- 5)
Sec.
35- 5. (Repealed).
(Source: P.A.
87- 1062. Repealed by P.A. 90- 424, eff. 1- 1- 98.)
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(805
ILCS 180/35- 7)
Sec.
35- 7. Member or manager's power and liability as agent
after dissolution.
(a)
A limited liability company is bound by a member or manager's
act after dissolution that:
(1)
is appropriate for winding up the company's
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(2)
would have bound the company under Section 13- 5
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before
dissolution, if the other party to the transaction
did not have notice of the dissolution.
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(b)
A member or manager who, with knowledge of the dissolution,
subjects a limited liability company to liability by an act
that is not appropriate for winding up the company's business
is liable to the company for any damage caused to the company
arising from the liability.
(Source: P.A.
90- 424, eff. 1- 1- 98.)
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(805
ILCS 180/35- 10)
Sec.
35- 10. Distribution of assets in winding up limited liability
company's business.
(a)
In winding up a limited liability company's business, the assets
of the company must be applied to discharge its obligations to
creditors, including members who are creditors. Any surplus must
be applied to pay in money the net amount distributable to members
in accordance with their right to distributions under subsection
(b) of this Section.
(b)
Each member is entitled to a distribution upon the winding up
of the limited liability company's business, consisting of a
return of all contributions that have not previously been returned
and a distribution of any remainder in equal shares.
(Source: P.A.
90- 424, eff. 1- 1- 98.)
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(805
ILCS 180/35- 15)
Sec.
35- 15. Articles of dissolution. When all debts, liabilities,
and obligations of the limited liability company have been paid
and discharged or adequate provision has been made therefor and
all of the remaining property and assets of the limited liability
company have been distributed to the members, articles of dissolution
shall be executed in duplicate in the manner prescribed in Section
5- 45 and shall set forth all of the following:
(1)
The name of the limited liability company.
(2)
That all debts, obligations, and liabilities of the limited liability
company have been paid and discharged or that adequate provision
has been made therefor.
(3)
That all the remaining property and assets of the limited liability
company have been distributed among its members in accordance
with their respective rights and interests.
(4)
That there are no suits pending against the company in any court
or that adequate provision has been made for the satisfaction
of any judgment, order, or decree that may be entered against
it in any pending suit.
(Source: P.A.
87- 1062.)
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(805
ILCS 180/35- 20)
Sec.
35- 20. Filing of articles of dissolution.
(a)
Duplicate originals of the articles of dissolution shall be delivered
to the Secretary of State. If the Secretary of State finds that
the articles of dissolution conform to law, he or she shall,
when all required fees have been paid:
(1)
endorse on each duplicate original the word
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"Filed" and
the date of the filing thereof; and
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(2)
file one duplicate original in his or her office.
(b)
A duplicate original of the articles of dissolution shall be returned
to the representative of the dissolved limited liability company.
Upon the filing of the articles of dissolution, the existence of
the company shall terminate, and its articles of organization shall
be deemed cancelled, except for the purpose of suits, other proceedings,
and appropriate action as provided in this Article. The manager
or managers or member or members at the time of termination, or
those that remain, shall thereafter be trustee for the members
and creditors of the terminated company and, in that capacity,
shall have authority to convey or distribute any company property
discovered after termination and take any other action that may
be necessary on behalf of and in the name of the terminated company.
(Source: P.A.
90- 424, eff. 1- 1- 98.)
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(805
ILCS 180/35- 25)
Sec.
35- 25. Grounds of administrative dissolution. The Secretary
of State may dissolve any limited liability company administratively
if any of the following occur:
(1)
it has failed to file its annual report and pay its fee as required
by this Act before the first day of the anniversary month or,
within 180 days of the anniversary day;
(2)
it has failed to file in the Office of the Secretary of State
any report within 180 days of the date for filing the report;
or
(3)
it has failed to appoint and maintain a registered agent in Illinois
within 60 days after a registered agent's notice of resignation
under Section 1- 35.
(Source: P.A.
91- 354, eff. 1- 1- 00.)
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(805
ILCS 180/35- 30)
Sec.
35- 30. Procedure for administrative dissolution.
(a)
After the Secretary of State determines that one or more grounds
exist under Section 35- 25 for the administrative dissolution
of a limited liability company, the Secretary of State shall
send a notice of delinquency by regular mail to each delinquent
limited liability company at its registered office or, if the
limited liability company has failed to maintain a registered
office, then to the last known address shown on the records of
the Secretary of State for the office at which records of the
limited liability company are maintained in accordance with Section
1- 40 of this Act.
(b)
If the limited liability company does not correct the default
within 120 days following the date of the notice of delinquency,
the Secretary of State shall thereupon dissolve the limited liability
company by issuing a notice of dissolution that recites the grounds
for dissolution and its effective date. The Secretary of State
shall file the original of the notice in his or her office and
mail one copy to the limited liability company at its registered
office or, if the limited liability company has failed to maintain
a registered office, then to the last known address shown on
the records of the Secretary of State for the office at which
records of the limited liability company are maintained in accordance
with Section 1- 40 of this Act.
(c)
Upon the administrative dissolution of a limited liability company,
a dissolved limited liability company shall continue for only
the purpose of winding up its business. A dissolved limited liability
company may take all action authorized under Section 1- 30
or necessary to wind up its business and affairs and terminate.
(Source: P.A.
93- 59, eff. 7- 1- 03.)
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(805
ILCS 180/35- 35)
Sec.
35- 35. (Repealed).
(Source: P.A.
87- 1062. Repealed by P.A. 90- 424, eff. 1- 1- 98.)
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(805
ILCS 180/35- 40)
Sec.
35- 40. Reinstatement following administrative dissolution.
(a)
A limited liability company administratively dissolved under
Section 35- 25 may be reinstated by the Secretary of State
following the date of issuance of the notice of dissolution upon:
(1)
The filing of an application for reinstatement.
(2)
The filing with the Secretary of State by the
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limited
liability company of all reports then due and theretofore
becoming due.
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(3)
The payment to the Secretary of State by the
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limited
liability company of all fees and penalties then
due and theretofore becoming due.
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(b)
The application for reinstatement shall be executed and filed
in duplicate in accordance with Section 5- 45 of this
Act and shall set forth all of the following:
(1)
The name of the limited liability company at the
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time
of the issuance of the notice of dissolution.
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(2)
If the name is not available for use as
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determined
by the Secretary of State at the time of filing the
application for reinstatement, the name of the limited
liability company as changed, provided that any change
of name is properly effected under Section 1- 10
and Section 5.25 of this Act.
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(3)
The date of issuance of the notice of
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(4)
The address, including street and number or
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rural
route number of the registered office of the limited
liability company upon reinstatement thereof and
the name of its registered agent at that address
upon the reinstatement of the limited liability company,
provided that any change from either the registered
office or the registered agent at the time of dissolution
is properly reported under Section 1- 35 of
this Act.
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(c)
When a dissolved limited liability company has complied with
the provisions of the Section, the Secretary of State shall
file the application for reinstatement.
(d)
Upon the filing of the application for reinstatement, the limited
liability company existence shall be deemed to have continued without
interruption from the date of the issuance of the notice of dissolution,
and the limited liability company shall stand revived with the
powers, duties, and obligations as if it had not been dissolved;
and all acts and proceedings of its members or managers, acting
or purporting to act in that capacity, that would have been legal
and valid but for the dissolution, shall stand ratified and confirmed.
(Source: P.A.
94- 605, eff. 1- 1- 06.)
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(805
ILCS 180/35- 45)
Sec.
35- 45. Events causing member's dissociation. A member is
dissociated from a limited liability company upon the occurrence
of any of the following events:
(1)
The company's having notice of the member's express will to withdraw
upon the date of notice or on a later date specified by the member.
(2)
An event agreed to in the operating agreement as causing the
member's dissociation.
(3)
Upon transfer of all of a member's distributional interest, other
than a transfer for security purposes or a court order charging
the member's distributional interest that has not been foreclosed.
(4)
The member's expulsion pursuant to the operating agreement.
(5)
The member's expulsion by unanimous vote of the other members
if:
(A)
it is unlawful to carry on the company's
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business
with the member;
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(B)
there has been a transfer of substantially all
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of
the member's distributional interest, other than
a transfer for security purposes or a court order
charging the member's distributional interest that
has not been foreclosed;
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(C)
within 90 days after the company notifies a
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corporate
member that it will be expelled because it has filed
a certificate of dissolution or the equivalent, its
charter has been revoked, or its right to conduct
business has been suspended by the jurisdiction of
its incorporation, the member fails to obtain a revocation
of the certificate of dissolution or a reinstatement
of its charter or its right to conduct business;
or
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(D)
a partnership or a limited liability company
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that
is a member has been dissolved and its business is
being wound up.
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(6)
On application by the company or another member, the member's
expulsion by judicial determination because the member:
(A)
engaged in wrongful conduct that adversely and
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materially
affected the company's business;
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(B)
willfully or persistently committed a material breach of
the operating agreement or of a duty owed to the company
or the other members under Section 15- 3; or
(C)
engaged in conduct relating to the company's business that makes
it not reasonably practicable to carry on the business with the
member.
(7)
The member's:
(A)
becoming a debtor in bankruptcy;
(B)
executing an assignment for the benefit of
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(C)
seeking, consenting to, or acquiescing in the
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