PocketLaw | Illinois Compiled Statutes

Dissolution

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(805 ILCS 215/Art. 8 heading)

ARTICLE 8 DISSOLUTION

(805 ILCS 215/801)

Sec. 801. Nonjudicial dissolution. Except as otherwise provided in Section 802, a limited partnership is dissolved, and its activities must be wound up, only upon the occurrence of any of the following:

(1) the happening of an event specified in the partnership agreement;
(2) the consent of all general partners and of limited partners owning a majority of the rights to receive distributions as limited partners at the time the consent is to be effective;
(3) after the dissociation of a person as a general partner:

(A) if the limited partnership has at least one remaining general partner, the consent to dissolve the limited partnership given within 90 days after the dissociation by partners owning a majority of the rights to receive distributions as partners at the time the consent is to be effective; or
(B) if the limited partnership does not have a remaining general partner, the passage of 90 days after the dissociation, unless before the end of the period:

(i) consent to continue the activities of the limited partnership and admit at least one general partner is given by limited partners owning a majority of the rights to receive distributions as limited partners at the time the consent is to be effective; and
(ii) at least one person is admitted as a general partner in accordance with the consent;

(4) the passage of 90 days after the dissociation of the limited partnership's last limited partner, unless before the end of the period the limited partnership admits at least one limited partner; or
(5) the signing and filing of a declaration of dissolution by the Secretary of State under Section 809(c).

(Source: P.A. 93-967, eff. 1-1-05.)

(805 ILCS 215/802)

Sec. 802. Judicial dissolution. On application by a partner the circuit court may order dissolution of a limited partnership if it is not reasonably practicable to carry on the activities of the limited partnership in conformity with the partnership agreement.

(Source: P.A. 93-967, eff. 1-1-05.)

(805 ILCS 215/803)

Sec. 803. Winding up.

(a) A limited partnership continues after dissolution only for the purpose of winding up its activities.

(b) In winding up its activities, the limited partnership:

(1) may amend its certificate of limited partnership to state that the limited partnership is dissolved, preserve the limited partnership business or property as a going concern for a reasonable time, prosecute and defend actions and proceedings, whether civil, criminal, or administrative, transfer the limited partnership's property, settle disputes by mediation or arbitration, file a statement of termination as provided in Section 203, and perform other necessary acts; and
(2) shall discharge the limited partnership's liabilities, settle and close the limited partnership's activities, and marshal and distribute the assets of the partnership.

(c) If a dissolved limited partnership does not have a general partner, a person to wind up the dissolved limited partnership's activities may be appointed by the consent of limited partners owning a majority of the rights to receive distributions as limited partners at the time the consent is to be effective. A person appointed under this subsection:

(1) has the powers of a general partner under Section 804; and
(2) shall promptly amend the certificate of limited partnership to state:

(A) that the limited partnership does not have a general partner;
(B) the name of the person that has been appointed to wind up the limited partnership; and
(C) the street and mailing address of the person.

(d) On the application of any partner, the circuit court may order judicial supervision of the winding up, including the appointment of a person to wind up the dissolved limited partnership's activities, if:

(1) a limited partnership does not have a general partner and within a reasonable time following the dissolution no person has been appointed pursuant to subsection (c); or
(2) the applicant establishes other good cause.

(Source: P.A. 93-967, eff. 1-1-05.)

(805 ILCS 215/804)

Sec. 804. Power of general partner and person dissociated as general partner to bind partnership after dissolution.

(a) A limited partnership is bound by a general partner's act after dissolution which:

(1) is appropriate for winding up the limited partnership's activities; or
(2) would have bound the limited partnership under Section 402 before dissolution, if, at the time the other party enters into the transaction, the other party does not have notice of the dissolution.

(b) A person dissociated as a general partner binds a limited partnership through an act occurring after dissolution if:

(1) at the time the other party enters into the transaction:

(A) less than two years has passed since the dissociation; and
(B) the other party does not have notice of the dissociation and reasonably believes that the person is a general partner; and

(2) the act:

(A) is appropriate for winding up the limited partnership's activities; or
(B) would have bound the limited partnership under Section 402 before dissolution and at the time the other party enters into the transaction the other party does not have notice of the dissolution.

(Source: P.A. 93-967, eff. 1-1-05.)

(805 ILCS 215/805)

Sec. 805. Liability after dissolution of general partner and person dissociated as general partner to limited partnership, other general partners, and persons dissociated as general partner.

(a) If a general partner having knowledge of the dissolution causes a limited partnership to incur an obligation under Section 804(a) by an act that is not appropriate for winding up the partnership's activities, the general partner is liable:

(1) to the limited partnership for any damage caused to the limited partnership arising from the obligation; and
(2) if another general partner or a person dissociated as a general partner is liable for the obligation, to that other general partner or person for any damage caused to that other general partner or person arising from the liability.

(b) If a person dissociated as a general partner causes a limited partnership to incur an obligation under Section 804(b), the person is liable:

(1) to the limited partnership for any damage caused to the limited partnership arising from the obligation; and
(2) if a general partner or another person dissociated as a general partner is liable for the obligation, to the general partner or other person for any damage caused to the general partner or other person arising from the liability.

(Source: P.A. 93-967, eff. 1-1-05.)

(805 ILCS 215/806)

Sec. 806. Known claims against dissolved limited partnership.

(a) A dissolved limited partnership may dispose of the known claims against it by following the procedure described in subsection (b).

(b) A dissolved limited partnership may notify its known claimants of the dissolution in a record. The notice must:

(1) specify the information required to be included in a claim;
(2) provide a mailing address to which the claim is to be sent;
(3) state the deadline for receipt of the claim, which may not be less than 120 days after the date the notice is received by the claimant;
(4) state that the claim will be barred if not received by the deadline; and
(5) unless the limited partnership has been throughout its existence a limited liability limited partnership, state that the barring of a claim against the limited partnership will also bar any corresponding claim against any general partner or person dissociated as a general partner which is based on Section 404.

(1) the claim is not received by the specified deadline; or
(2) in the case of a claim that is timely received but rejected by the dissolved limited partnership, the claimant does not commence an action to enforce the claim against the limited partnership within 90 days after the receipt of the notice of the rejection.

(d) This Section does not apply to a claim based on an event occurring after the effective date of dissolution or a liability that is contingent on that date.

(Source: P.A. 93-967, eff. 1-1-05.)

(805 ILCS 215/807)

Sec. 807. Other claims against dissolved limited partnership.

(a) A dissolved limited partnership may publish notice of its dissolution and request persons having claims against the limited partnership to present them in accordance with the notice.

(b) The notice must:

(1) be published at least once in a newspaper of general circulation in the county in which the dissolved limited partnership's principal office is located or, if it has none in this State, in the county in which the limited partnership's designated office is or was last located;
(2) describe the information required to be contained in a claim and provide a mailing address to which the claim is to be sent;
(3) state that a claim against the limited partnership is barred unless an action to enforce the claim is commenced within five years after publication of the notice; and
(4) unless the limited partnership has been throughout its existence a limited liability limited partnership, state that the barring of a claim against the limited partnership will also bar any corresponding claim against any general partner or person dissociated as a general partner which is based on Section 404.

(c) If a dissolved limited partnership publishes a notice in accordance with subsection (b), the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim against the dissolved limited partnership within five years after the publication date of the notice:

(1) a claimant that did not receive notice in a record under Section 806;
(2) a claimant whose claim was timely sent to the dissolved limited partnership but not acted on; and
(3) a claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.

(d) A claim not barred under this Section may be enforced:

(1) against the dissolved limited partnership, to the extent of its undistributed assets;
(2) if the assets have been distributed in liquidation, against a partner or transferee to the extent of that person's proportionate share of the claim or the limited partnership's assets distributed to the partner or transferee in liquidation, whichever is less, but a person's total liability for all claims under this paragraph does not exceed the total amount of assets distributed to the person as part of the winding up of the dissolved limited partnership; or
(3) against any person liable on the claim under Section 404.

(Source: P.A. 93-967, eff. 1-1-05.)

(805 ILCS 215/808)

Sec. 808. Liability of general partner and person dissociated as general partner when claim against limited partnership barred. If a claim against a dissolved limited partnership is barred under Section 806 or 807, any corresponding claim under Section 404 is also barred.

(Source: P.A. 93-967, eff. 1-1-05.)

(805 ILCS 215/809)

Sec. 809. Administrative dissolution.

(a) The Secretary of State may dissolve a limited partnership administratively if the limited partnership does not, within 60 days after the due date:

(1) pay any fee, tax, or penalty due to the Secretary of State under this Act or other law;
(2) file its annual report with the Secretary of State; or
(3) appoint and maintain an agent for service of process in Illinois after a registered agent's notice of resignation under Section 116.

(b) If the Secretary of State determines that a ground exists for administratively dissolving a limited partnership, the Secretary of State shall file a record of the determination and send a copy of the filed record to the limited partnership's agent for service of process in this State, or if the limited partnership does not appoint and maintain a proper agent, to the limited partnership's designated office.

(c) If within 60 days after service of the copy of the record of determination the limited partnership does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist, the Secretary of State shall administratively dissolve the limited partnership by preparing, signing, and filing a declaration of dissolution that states the grounds for dissolution. The Secretary of State shall send a copy to the limited partnership's agent for service of process in this State, or if the limited partnership does not appoint and maintain a proper agent, to the limited partnership's designated office.

(d) A limited partnership administratively dissolved continues its existence but may carry on only activities necessary or appropriate to wind up its activities under Sections 803 and 812 and to notify claimants under Sections 806 and 807.

(e) The administrative dissolution of a limited partnership does not terminate the authority of its agent for service of process.

(f) The Secretary of State shall, from information received from the Illinois Commerce Commission, compile and keep a list of all domestic limited partnerships that are regulated pursuant to the provisions of the Public Utilities Act, or the Collateral Recovery Act, or the Personal Property Storage Act, or Chapter 18a, 18c, or 18d of the Illinois Vehicle Code and which hold, as a prerequisite for doing business in this State, any franchise, license, permit, or right to engage in any business regulated by such Acts.

(g) Each month the Secretary of State shall, by written notice, advise the Chief Clerk of the Illinois Commerce Commission of any domestic limited partnership on the list maintained under subsection (f) that has been dissolved within the month.

(h) The Secretary of State and the Illinois Commerce Commission may provide each other the information required under this Section in an electronic format, including, without limitation by means of such agreed access, those records of the Secretary of State that will provide the Illinois Commerce Commission the information it requires under the statutes it administers. The provision of information under this Section shall begin as soon as is practicable, but in no event later than October 1, 2020.

(Source: P.A. 101-494, eff. 1-1-20.)

(805 ILCS 215/810)

Sec. 810. Reinstatement following administrative dissolution.

(a) A limited partnership that has been administratively dissolved under Section 809 may be reinstated by the Secretary of State following the date of dissolution upon:

(1) the filing of an application for reinstatement;
(2) the filing with the Secretary of State of all reports then due and becoming due; and
(3) the payment to the Secretary of State of all fees and penalties then due and becoming due.

(b) The application for reinstatement shall be executed and filed in duplicate in accordance with Section 204 and shall set forth all of the following:

(1) the name of the limited partnership at the time of dissolution;
(2) the date of dissolution;
(3) the agent for service of process and the address of the agent for service of process; provided that any change to either the agent for service of process or the address of the agent for service of process is properly reported under Section 115.

(c) When a limited partnership that has been administratively dissolved has complied with the provisions of this Section, the Secretary of State shall file the application for reinstatement.

(d) Upon filing of the application for reinstatement, the limited partnership existence shall be deemed to have continued without interruption from the date of dissolution and shall stand revived with such powers, duties, and obligations, as if it had not been dissolved. All acts and proceedings of its partners, officers, employees, and agents, acting or purporting to act in that capacity, and which would have been legal and valid but for the dissolution shall stand ratified and confirmed.

(e) Without limiting the generality of subsection (d), upon the filing of the application for reinstatement, no limited partner or officer of the partnership shall be personally liable for the debts and liabilities of the limited partnership incurred during the period of administrative dissolution by reason of the fact that the limited partnership was administratively dissolved at the time the debts or liabilities were incurred.

(Source: P.A. 97-839, eff. 7-20-12; 98-776, eff. 1-1-15.)

(805 ILCS 215/811)

Sec. 811. Appeal from denial of reinstatement.

(a) If the Secretary of State denies a limited partnership's application for reinstatement following administrative dissolution, the Secretary of State shall prepare, sign and file a notice that explains the reason or reasons for denial and serve the limited partnership with a copy of the notice.

(b) Within 30 days after service of the notice of denial, the limited partnership may appeal from the denial of reinstatement by petitioning the Circuit Court of Sangamon County to set aside the dissolution. The petition must be served on the Secretary of State and contain a copy of the Secretary of State's declaration of dissolution, the limited partnership's application for reinstatement, and the Secretary of State's notice of denial.

(c) The court may summarily order the Secretary of State to reinstate the dissolved limited partnership or may take other action the court considers appropriate.

(Source: P.A. 93-967, eff. 1-1-05.)

(805 ILCS 215/812)

Sec. 812. Disposition of assets; when contributions required.

(a) In winding up a limited partnership's activities, the assets of the limited partnership, including the contributions required by this Section, must be applied to satisfy the limited partnership's obligations to creditors, including, to the extent permitted by law, partners that are creditors.

(b) Any surplus remaining after the limited partnership complies with subsection (a) must be paid in cash as a distribution.

(c) If a limited partnership's assets are insufficient to satisfy all of its obligations under subsection (a), with respect to each unsatisfied obligation incurred when the limited partnership was not a limited liability limited partnership, the following rules apply:

(1) Each person that was a general partner when the obligation was incurred and that has not been released from the obligation under Section 607 shall contribute to the limited partnership for the purpose of enabling the limited partnership to satisfy the obligation. The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of general partner in effect for each of those persons when the obligation was incurred.
(2) If a person does not contribute the full amount required under paragraph (1) with respect to an unsatisfied obligation of the limited partnership, the other persons required to contribute by paragraph (1) on account of the obligation shall contribute the additional amount necessary to discharge the obligation. The additional contribution due from each of those other persons is in proportion to the right to receive distributions in the capacity of general partner in effect for each of those other persons when the obligation was incurred.
(3) If a person does not make the additional contribution required by paragraph (2), further additional contributions are determined and due in the same manner as provided in that paragraph.

(d) A person that makes an additional contribution under subsection (c)(2) or (3) may recover from any person whose failure to contribute under subsection (c)(1) or (2) necessitated the additional contribution. A person may not recover under this subsection more than the amount additionally contributed. A person's liability under this subsection may not exceed the amount the person failed to contribute.

(e) The estate of a deceased individual is liable for the person's obligations under this Section.

(f) An assignee for the benefit of creditors of a limited partnership or a partner, or a person appointed by a court to represent creditors of a limited partnership or a partner, may enforce a person's obligation to contribute under subsection (c).

(Source: P.A. 93-967, eff. 1-1-05.)

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