(805 ILCS 180/15-3)
Sec. 15-3. General standards of member and manager's conduct.
(a) The fiduciary duties a member owes to a member-managed company and its other members include the duty of loyalty and the duty of care referred to in subsections (b) and (c) of this Section.
(b) A member's duty of loyalty to a member-managed company and its other members includes the following:
(1) to account to the company and to hold as trustee
for it any property, profit, or benefit derived by the member in the conduct or winding up of the company's business or derived from a use by the member of the company's property, including the appropriation of a company's opportunity;
(2) to act fairly when a member deals with the
company in the conduct or winding up of the company's business as or on behalf of a party having an interest adverse to the company; and
(3) to refrain from competing with the company in the
conduct of the company's business before the dissolution of the company.
(c) A member's duty of care to a member-managed company and its other members in the conduct of and winding up of the company's business is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.
(d) A member shall discharge his or her duties to a member-managed company and its other members under this Act or under the operating agreement and exercise any rights consistent with the obligation of good faith and fair dealing.
(e) A member of a member-managed company does not violate a duty or obligation under this Act or under the operating agreement merely because the member's conduct furthers the member's own interest.
(f) This Section applies to a person winding up the limited liability company's business as the personal or legal representative of the last surviving member as if the person were a member.
(g) In a manager-managed company:
(1) a member who is not also a manager owes no duties
to the company or to the other members solely by reason of being a member;
(2) a manager is held to the same standards of
conduct prescribed for members in subsections (b), (c), (d), and (e) of this Section;
(3) a member is held to the standards of conduct in
subsections (b), (c), (d), and (e) of this Section to the extent that the member exercises the managerial authority vested in a manager by this Act; and
(4) a manager is relieved of liability imposed by law
for violations of the standards prescribed by subsections (b), (c), (d), and (e) to the extent of the managerial authority delegated to the members by the operating agreement.
(Source: P.A. 95-331, eff. 8-21-07; 96-263, eff. 1-1-10.)
Sections: Previous 15-1 15-3 15-5 15-7 15-10 15-15 15-20 Next
Last modified: February 18, 2015