Bill Text: IL HB2860 | 2019-2020 | 101st General Assembly | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Entity Omnibus Act. Provides that the organic law of the entity, in addition to the Act, may displace the principles of law and equity. Provides that the Secretary of State may propound interrogatories as may be reasonably necessary to ascertain whether entities subject to the Act have complied with the Act. Provides process for the response to and filing of interrogatories by the Secretary. Provides that the Act controls in the event of any conflict with the provisions of other specified Acts applicable to business organizations. Provides that an entity shall maintain a plan of conversion or domestication in accordance with the entity's policy for maintaining books and records. Deletes language exempting certain entities from the requirement that a plan of conversion be approved in a record. Deletes language allowing the filing of a plan of conversion, instead of a statement of conversion, under certain circumstances. Makes other changes concerning: the effect of conversion or domestication on the name of an entity; and the effective date of a domestication. Effective July 1, 2019.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2019-08-23 - Public Act . . . . . . . . . 101-0491 [HB2860 Detail]

Download: Illinois-2019-HB2860-Engrossed.html

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AN ACT concerning business.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Entity Omnibus Act is amended by changing
Sections 103, 202, 203, 205, 206, 302, 305, and 306 and by
adding Sections 110 and 111 as follows:
(805 ILCS 415/103)
Sec. 103. Relationship of Act to other laws.
(a) Unless displaced by particular provisions of this Act
or the organic law, the principles of law and equity supplement
this Act.
(b) This Act does not authorize an act prohibited by, and
does not affect, the application or requirements of law, other
than this Act.
(c) A transaction effected under this Act may not create or
impair any right or obligation on the part of a person under a
provision of the law of this State other than this Act relating
to a transaction involving a converting or domesticating entity
unless:
(1) in the event the entity does not survive the
transaction, the transaction satisfies any requirements of
the provision; or
(2) in the event the entity survives the transaction,

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the approval of the plan is by a vote of the interest
holders or governors which would be sufficient to create or
impair the right or obligation directly under the
provision.
(Source: P.A. 100-561, eff. 7-1-18.)
(805 ILCS 415/110 new)
Sec. 110. Interrogatories to be propounded by the Secretary
of State.
(a) The Secretary of State may propound to any entity,
domestic or foreign, subject to the provisions of this Act, and
to any governor or interest holder thereof, such
interrogatories as may be reasonably necessary and proper to
enable the Secretary to ascertain whether the entity has
complied with all the provisions of this Act applicable to the
entity. The interrogatories shall be answered within 30 days
after the mailing thereof, or within such additional time as
shall be fixed by the Secretary of State, and the answers
thereto shall be full and complete and shall be made in writing
and under oath. If the interrogatories are directed to an
individual, they shall be answered by him or her, and if
directed to an entity, they shall be answered by the governor
or interest holder thereof. The Secretary of State need not
file any document to which the interrogatories relate until the
interrogatories are answered as herein provided, and not then
if the answers thereto disclose that the document is not in

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conformity with the provisions of this Act. The Secretary of
State shall certify to the Attorney General, for such action as
the Attorney General may deem appropriate, all interrogatories
and answers thereto that disclose a violation of any of the
provisions of this Act.
(b) Interrogatories propounded by the Secretary of State
and the answers thereto shall not be open to public inspection
nor shall the Secretary of State disclose any facts or
information obtained therefrom except in so far as official
duty may require the same to be made public or if the
interrogatories or the answers thereto are required for
evidence in any criminal proceeding or in any other action by
the State.
(805 ILCS 415/111 new)
Sec. 111. Application of other Acts. The Business
Corporation Act of 1983, the General Not For Profit Corporation
Act of 1986, the Limited Liability Company Act, the Uniform
Limited Partnership Act (2001), and the Uniform Partnership Act
(1997), as now or hereafter amended, shall govern all matters
related to the entities named in each of those Acts and in this
Act except where inconsistent with the letter and purpose of
this Act. This Act controls in the event of any conflict with
the provisions of the above-named Acts or other laws.
(805 ILCS 415/202)

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Sec. 202. Plan of conversion.
(a) A domestic entity may convert to a different type of
entity under this Article by approving a plan of conversion.
The plan must be in a record and contain:
(1) the name and type of the converting entity;
(2) the name, jurisdiction of organization, and type of
the converted entity;
(3) the manner of converting the interests in the
converting entity into interests, securities, obligations,
rights to acquire interests or securities, cash, or other
property, or any combination of the foregoing;
(4) the proposed public organic document of the
converted entity if it will be a filing entity;
(5) the full text of the private organic rules of the
converted entity that are proposed to be in a record;
(6) the other terms and conditions of the conversion;
and
(7) any other provision required by the law of this
State or the organic rules of the converting entity.
(b) A plan of conversion may contain any other provision
not prohibited by law.
(c) The entity shall maintain the plan of conversion in
accordance with the entity's policy for maintaining books and
records.
(Source: P.A. 100-561, eff. 7-1-18.)

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(805 ILCS 415/203)
Sec. 203. Approval of conversion.
(a) A plan of conversion is not effective unless it has
been approved:
(1) by a domestic converting entity:
(A) in accordance with the requirements, if any, in
its organic rules for approval of a conversion;
(B) if its organic rules do not provide for
approval of a conversion, in accordance with the
requirements, if any, in its organic law and organic
rules for approval of:
(i) in the case of an entity that is not a
business corporation, a merger, as if the
conversion were a merger; or
(ii) in the case of a business corporation, a
merger requiring approval by a vote of the interest
holders of the business corporation, as if the
conversion were that type of merger; or
(C) if neither its organic law nor organic rules
provide for approval of a conversion or a merger
described in subparagraph (B)(ii), by all of the
interest holders of the entity entitled to vote on or
consent to any matter; and
(2) in a record, by each interest holder of a domestic
converting entity that will have interest holder liability
for liabilities that arise after the conversion becomes

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effective. , unless, in the case of an entity that is not a
business or nonprofit corporation:
(A) the organic rules of the entity provide in a
record for the approval of a conversion or a merger in
which some or all of its interest holders become
subject to interest holder liability by the vote or
consent of fewer than all of the interest holders; and
(B) the interest holder voted for or consented in a
record to that provision of the organic rules or became
an interest holder after the adoption of that
provision.
(b) A conversion of a foreign converting entity is not
effective unless it is approved by the foreign entity in
accordance with the law of the foreign entity's jurisdiction of
organization.
(Source: P.A. 100-561, eff. 7-1-18.)
(805 ILCS 415/205)
Sec. 205. Statement of conversion; effective date.
(a) A statement of conversion must be signed on behalf of
the converting entity and filed with the Secretary of State.
(b) A statement of conversion must contain:
(1) the name and type of the converting entity;
(2) the name and type of the converted entity;
(3) if the statement of conversion is not to be
effective upon filing, the later date and time on which it

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will become effective, which may not be more than 90 days
after the date of filing;
(4) a statement that the plan of conversion was
approved in accordance with this Article;
(5) the text of the converted entity's public organic
document, as an attachment, signed by a person authorized
by the entity; and
(6) if the converted entity is a domestic limited
liability partnership, the text of its statement of
qualification, as an attachment, signed by a person
authorized by the entity.
(c) In addition to the requirements of subsection (b), a
statement of conversion may contain any other provision not
prohibited by law.
(d) If the converted entity is a domestic entity, its
public organic document, if any, must satisfy the requirements
of the law of this State and may omit any provision that is not
required to be included in a restatement of the public organic
document.
(e) (Blank). A plan of conversion that is signed on behalf
of a domestic converting entity and meets all of the
requirements of subsection (b) may be filed with the Secretary
of State instead of a statement of conversion and upon filing
has the same effect. If a plan of conversion is filed as
provided in this subsection, references in this Act to a
statement of conversion refer to the plan of conversion filed

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under this subsection.
(f) A statement of conversion becomes effective upon the
date and time of filing or the later date and time specified in
the statement of conversion.
(Source: P.A. 100-561, eff. 7-1-18.)
(805 ILCS 415/206)
Sec. 206. Effect of conversion.
(a) When a conversion becomes effective:
(1) the converted entity is:
(A) organized under and subject to the organic law
of the converted entity; and
(B) the same entity without interruption as the
converting entity, even though the organic law of the
converted entity to may require or allow the name of
the converted entity may be modified based on the type
of entity;
(2) all property of the converting entity continues to
be vested in the converted entity without assignment,
reversion, or impairment;
(3) all liabilities of the converting entity continue
as liabilities of the converted entity;
(4) except as provided by law other than this Act or
the plan of conversion, all of the rights, privileges,
immunities, powers, and purposes of the converting entity
remain in the converted entity;

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(5) the name of the converted entity may be substituted
for the name of the converting entity in any pending action
or proceeding;
(6) if a converted entity is a filing entity, its
public organic document is effective and is binding on its
interest holders;
(7) if the converted entity is a limited liability
partnership, its statement of qualification is effective
simultaneously;
(8) the private organic rules of the converted entity
that are to be in a record, if any, approved as part of the
plan of conversion are effective and are binding on and
enforceable by:
(A) its interest holders; and
(B) in the case of a converted entity that is not a
business corporation or nonprofit corporation, any
other person that is a party to an agreement that is
part of the entity's private organic rules; and
(9) the interests in the converting entity are
converted, and the interest holders of the converting
entity are entitled only to the rights provided to them
under the plan of conversion and to any appraisal rights
they have under Section 109 and the converting entity's
organic law.
(b) Except as otherwise provided in the organic law or
organic rules of the converting entity, the conversion does not

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give rise to any rights that an interest holder, governor, or
third party would otherwise have upon a dissolution,
liquidation, or winding-up of the converting entity.
(c) When a conversion becomes effective, a person that did
not have interest holder liability with respect to the
converting entity and that becomes subject to interest holder
liability with respect to a domestic entity as a result of a
conversion has interest holder liability only to the extent
provided by the organic law of the entity and only for those
liabilities that arise after the conversion becomes effective.
(d) When a conversion becomes effective:
(1) the conversion does not discharge any interest
holder liability under the organic law of a domestic
converting entity to the extent the interest holder
liability arose before the conversion became effective;
(2) a person does not have interest holder liability
under the organic law of a domestic converting entity for
any liability that arises after the conversion becomes
effective;
(3) the organic law of a domestic converting entity
continues to apply to the release, collection, or discharge
of any interest holder liability preserved under paragraph
(1) as if the conversion had not occurred; and
(4) a person has whatever rights of contribution from
any other person as are provided by the organic law or
organic rules of the domestic converting entity with

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respect to any interest holder liability preserved under
paragraph (1) as if the conversion had not occurred.
(e) When a conversion becomes effective, a foreign entity
that is the converted entity:
(1) may be served with process in this State for the
collection and enforcement of any of its liabilities; and
(2) appoints the Secretary of State as its agent for
service of process for collecting or enforcing those
liabilities.
(f) If the converting entity is a qualified foreign entity,
the certificate of authority or other foreign qualification of
the converting entity is canceled when the conversion becomes
effective.
(g) A conversion does not require the entity to wind up its
affairs and does not constitute or cause the dissolution of the
entity.
(Source: P.A. 100-561, eff. 7-1-18.)
(805 ILCS 415/302)
Sec. 302. Plan of domestication.
(a) A domestic entity may become a foreign entity in a
domestication by approving a plan of domestication. The plan
must be in a record and contain:
(1) the name and type of the domesticating entity;
(2) the name and jurisdiction of organization of the
domesticated entity;

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(3) the manner of converting the interests in the
domesticating entity into interests, securities,
obligations, rights to acquire interests or securities,
cash, or other property, or any combination of the
foregoing;
(4) the proposed public organic document of the
domesticated entity if it is a filing entity;
(5) the full text of the private organic rules of the
domesticated entity that are proposed to be in a record;
(6) the other terms and conditions of the
domestication; and
(7) any other provision required by the law of this
State or the organic rules of the domesticating entity.
(b) A plan of domestication may contain any other provision
not prohibited by law.
(c) The entity shall maintain the plan of domestication in
accordance with the entity's policy for maintaining books and
records.
(Source: P.A. 100-561, eff. 7-1-18.)
(805 ILCS 415/305)
Sec. 305. Statement of domestication; effective date.
(a) A statement of domestication must be signed on behalf
of the domesticating entity and filed with the Secretary of
State.
(b) A statement of domestication must contain:

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(1) the name, jurisdiction of organization, and type of
the domesticating entity;
(2) the name and jurisdiction of organization of the
domesticated entity;
(3) if the statement of domestication is not to be
effective upon filing, the later date and time on which it
will become effective, which may not be more than 30 90
days after the date of filing;
(4) if the domesticating entity is a domestic entity, a
statement that the plan of domestication was approved in
accordance with this Article or, if the domesticating
entity is a foreign entity, a statement that the
domestication was approved in accordance with the law of
its jurisdiction of organization;
(5) if the domesticated entity is a domestic filing
entity, its public organic document, as an attachment
signed by a person authorized by the entity;
(6) if the domesticated entity is a domestic limited
liability partnership, its statement of qualification, as
an attachment; and
(7) if the domesticated entity is a foreign entity that
is not a qualified foreign entity, a mailing address to
which the Secretary of State may send any process served on
the Secretary of State pursuant to subsection (e) of
Section 306.
(c) In addition to the requirements of subsection (b), a

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statement of domestication may contain any other provision not
prohibited by law.
(d) If the domesticated entity is a domestic entity, its
public organic document, if any, must satisfy the requirements
of the law of this State and may omit any provision that is not
required to be included in a restatement of the public organic
document.
(e) A statement of domestication becomes effective upon the
date and time of filing or the later date and time specified in
the statement of domestication.
(Source: P.A. 100-561, eff. 7-1-18.)
(805 ILCS 415/306)
Sec. 306. Effect of domestication.
(a) When a domestication becomes effective:
(1) the domesticated entity is:
(A) organized under and subject to the organic law
of the domesticated entity; and
(B) the same entity without interruption as the
domesticating entity, even though the organic law of
the domesticated entity may require or allow the name
of the domesticated entity to be modified;
(2) all property of the domesticating entity continues
to be vested in the domesticated entity without assignment,
reversion, or impairment;
(3) all liabilities of the domesticating entity

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continue as liabilities of the domesticated entity;
(4) except as provided by law other than this Act or
the plan of domestication, all of the rights, privileges,
immunities, powers, and purposes of the domesticating
entity remain in the domesticated entity;
(5) the name of the domesticated entity may be
substituted for the name of the domesticating entity in any
pending action or proceeding;
(6) if the domesticated entity is a filing entity, its
public organic document is effective and is binding on its
interest holders;
(7) the private organic rules of the domesticated
entity that are to be in a record, if any, approved as part
of the plan of domestication are effective and are binding
on and enforceable by:
(A) its interest holders; and
(B) in the case of a domesticated entity that is
not a business corporation or nonprofit corporation,
any other person that is a party to an agreement that
is part of the domesticated entity's private organic
rules; and
(8) the interests in the domesticating entity are
converted to the extent and as approved in connection with
the domestication, and the interest holders of the
domesticating entity are entitled only to the rights
provided to them under the plan of domestication and to any

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appraisal rights they have under Section 109 and the
domesticating entity's organic law.
(b) Except as otherwise provided in the organic law or
organic rules of the domesticating entity, the domestication
does not give rise to any rights that an interest holder,
governor, or third party would otherwise have upon a
dissolution, liquidation, or winding-up of the domesticating
entity.
(c) When a domestication becomes effective, a person that
did not have interest holder liability with respect to the
domesticating entity and that becomes subject to interest
holder liability with respect to a domestic entity as a result
of the domestication has interest holder liability only to the
extent provided by the organic law of the entity and only for
those liabilities that arise after the domestication becomes
effective.
(d) When a domestication becomes effective:
(1) the domestication does not discharge any interest
holder liability under the organic law of a domestic
domesticating entity to the extent the interest holder
liability arose before the domestication became effective;
(2) a person does not have interest holder liability
under the organic law of a domestic domesticating entity
for any liability that arises after the domestication
becomes effective;
(3) the organic law of a domestic domesticating entity

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continues to apply to the release, collection, or discharge
of any interest holder liability preserved under paragraph
(1) as if the domestication had not occurred; and
(4) a person has whatever rights of contribution from
any other person as are provided by the organic law or
organic rules of a domestic domesticating entity with
respect to any interest holder liability preserved under
paragraph (1) as if the domestication had not occurred.
(e) When a domestication becomes effective, a foreign
entity that is the domesticated entity:
(1) may be served with process in this State for the
collection and enforcement of any of its liabilities; and
(2) appoints the Secretary of State as its agent for
service of process for collecting or enforcing those
liabilities.
(f) If the domesticating entity is a qualified foreign
entity, the certificate of authority or other foreign
qualification of the domesticating entity is canceled when the
domestication becomes effective.
(g) A domestication does not require the entity to wind up
its affairs and does not constitute or cause the dissolution of
the entity.
(Source: P.A. 100-561, eff. 7-1-18.)
Section 99. Effective date. This Act takes effect July 1,
2019.