The Limited Liability Company Act allows an LLC to be created for any lawful purpose, other than insurance. 805 ILCS 180/1-25. An LLC may be designated as a “low-profit” limited liability company if it serves a charitable or educational purpose. 805 ILCS 180/1-26.
The Act grants LLCs several powers, including but not limited to:
- The right to sue and be sued;
- The right to purchase, gift, be gifted, or otherwise deal with in real or personal property;
- Lend money to its members or employees;
- Borrow money and incur liabilities;
- Invest surplus funds;
- Conduct business within and outside Illinois;
- Partner with other corporations;
- Enter into an operating agreement;
- Donate to charitable organizations;
805 ILCS 180/1-30
The Limited Liability Company Act allows for LLCs to enter operating agreements, which allows the LLC to customize their corporate governing principles. However, several of the default provisions that govern LLCs may not be altered by operating agreements. An operating agreement may not:
- Unreasonably restrict rights to information or access to records
- Alter the right to expel a member in specific circumstances
- Alter the requirement to wind up in the LLC’s business in specified circumstances
- Restrict certain distributional interests
- Eliminate or reduce certain responsibilities
806 ILCS 180/15-5(b)
LLC members owe a fiduciary duty of care and loyalty. 805 ILCS 180/15-3(a). A member may discharge this fiduciary duty in good faith, and in accordance with the company’s operating agreement. 805 ILCS 180/15-3(d). Operating agreements allow LLCs to (1) restrict or eliminate a fiduciary duty, other than the duty of care; (2) identify specific types or categories of activities that do not violate any fiduciary duty; and (3) alter the duty of care, except to authorize intentional misconduct or violation of law. 805 ILCS 180/15-5(c).
An LLC is usually dissolved at the initiation and consent of members. 805 ILCS 180/35-1. However, the Secretary of State may administratively dissolve an LLC under some circumstances if the LLC has become delinquent in payment, reporting, or other necessary administrative activities. 805 ILCS 180/35-25. In the case of administrative dissolution, an LLC may be reinstated upon proper filing with the Secretary of State. 805 ILCS 180/35-40.
Finally, members may individually dissociate from a member-managed LLC, so long as dissociation does not breach an express agreement. 805 ILCS 180/35-350.
For additional information on forming, dissolving, or dissociating from an LLC, get in touch with us at (312) 223-1699 or email Thomas E. Patterson at email@example.com for more advice and information.