Illinois Partnership Act

Illinois Partnership Act

Partnerships enable two or more individuals to pool their resources, talents, and expertise for common gain. The Illinois Uniform Partnership Act (“ILUPA”) regulates these partnerships in Illinois. The Act provides mandatory and default rules on a variety of topics relevant to partnerships, including governance, formation, finances, and dissolution. Mandatory rules are binding on all partnerships in Illinois and cannot be evaded by a contract. Default rules apply to an Illinois partnership unless the partnership contracts for something different in a partnership agreement.


805 ILCS 206

On January 1, 2003, the ILUPA was amended. One of the largest changes to the act was its list of nine provisions that partners could no longer waive in their agreement. Partners may not:

  1. Vary the rights and duties of executing, filing, and recording statements, except to eliminate the duty to provide copies of statements of all the partners.
  2. Unreasonably restrict the right of access to books and records under section 403(b).
  3. Eliminate or reduce a partner’s fiduciary duties.
  4. Eliminate or reduce the obligation of good faith and fair dealing.
  5. Vary the power to dissociate as partner,
  6. Vary the right of a court to expel a partner,
  7. Vary the requirement to wind up the partnership.
  8. Vary the law applicable to a limited liability partnership, and
  9. Restrict the rights of a person under the ILUPA.


805 ILCS 206/103(b)

Under the ILUPA, six events automatically dissolve a partnership: (1) dissociation of a partner in a partnership at will, (2) expiration of the partnership’s definite term, (3) a dissolving event stipulated in the partnership agreement, (4) an event that renders the partnership unlawful, (5) judicial petition, or (6) judicial determination that it is equitable to dissolve the partnership. Judicial petitions are commonly pursued when a partnership’s operation is no longer reasonably practicable due to one or more partner’s behavior.


Alternative solutions to dissolution exist, but they also carry significant legal and tax consequences. These alternatives include (1) negotiation and execution of a partnership agreement to clarify rights and responsibilities, (2) a partnership buyout agreement, (3) self-disassociation from the partnership, (4) partial or complete liquidation of the partnership’s assets, or (5) continuation of the partnership with the troublesome partner.

Actions against a partner by other partners or the partnership frequently allege breach of fiduciary duties or fraud.


If you are experiencing a partnership dispute, get in touch with us at (312) 223-1699 or email Thomas E. Patterson at for more advice and information.

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