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New law modernizes Illinois Limited Liability Company Act

Businesses will find it easier operate in Illinois under newly signed legislation sponsored by Sen. Don Harmon, D-Oak Park.

House Bill 4361 is a broad, comprehensive modernization of Illinois’ Limited Liability Company Act, which last was rewritten in 1994. The law had been updated in a piecemeal fashion since then, but it was due for a sweeping update.

“This update to Illinois’ LLC Act not only modernizes some of our laws, it also eliminates unclear or contradictory rules that can be frustrating for companies to navigate,” Harmon said. “It makes our laws more consistent with those of other states and enables Illinois to be a more attractive and inviting place for businesses to set up shop.”

The legislation was the result of a six-year project by the Institute of Illinois Business Law to update the state’s LLC Act. The project was prompted by the 2006 publication of the Revised Uniform Limited Liability Company Act by the National Conference of Commissioners on Uniform State Laws.

Joliet attorney Michael Hansen is past chairman of the Institute of Illinois Business Law, a group of about
40 corporate lawyers in Illinois who oversee the state’s business and corporate laws.

“Limited liability companies are now the favored business entity,” he said. “The changes to the Act will mean the formation in Illinois of more LLCs, while still providing necessary protections to the members of the LLC.”

Representatives Elaine Nekritz, D-Northbrook, and Carol Sente, D-Vernon Hills, sponsored the measure in the Illinois House.

— From the Illinois Business Journal

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