Public Act 100-0561 (IL)

Entity Conversions and Domestications

Statutes Amended: 805 ILCS 415/101

Effective Date: July 1, 2018

As part of Public Act 100-0561, Illinois will join the majority of states that recognize and allow for simple entity conversions and domestications to and from other states. Prior to this, entities would have to go through a more complicated process that usually would involve the creation of a new entity and the merge of the old entity to the new entity. On December 8, 2017, the Governor signed HB 2963 into law. HB 2963 contains the Entity Omnibus Act (the Act), which governs conversions and domestications. The Act centralizes conversions and domestiactions into one Act.

Article 2 of the Act governs conversions and Article 3 of the Act governs domestications. Pursuant to section 2-201, a domestic entity may become a domestic entity of another type or a foreign entity of a different type. Pursuant to section 3-301, a domestic entity may become a foreign entity through domestications and vice versa. A domestic entity that is attempting to convert or domesticate must have a plan of conversion/domestication approved.

The plan must contain to following:

  1. the name and type of the converting/domesticating entity;
  2. the name, jurisdiction of organization, and type of the converted/domesticated entity;
  3. the manner of converting/domesticating the interests in the converting/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 converted/domesticated entity if it will be a filing entity;
  5. the full text of the private organic rules of the converted/domesticated entity that are proposed to be in a record;
  6. the other terms and conditions of the conversion/domestication; and
  7. any other provision required by the law of this State or the organic rules of the converting/domesticating entity.

A plan of conversion/domestication is not effective until it have been approved by a domestic converting/domesticating entity in accordance with the requirements, and if any, in accordance with its organic rules for approval of conversion/domestication. Plans of conversion/domestication can be amended or abandoned. A statement of conversion/domestication must be signed on behalf of the converting/domesticating entity and filed with the Secretary of State. The statement must contain the name and type of the converting/domesticating entity and converted/domesticated entity, a statement that plan of conversion/domestication was approved in accordance with this article, the text of the converted/domesticated entity's public organic document, as an attachment, signed by a person authorized by the entity. The conversion/domestication is effective on the date and time the statement is filed or the later date that is specified in the statement of conversion/domestication.

Article 4 governs the fees charged by the Secretary of State. The Secretary is authorized to adopt rules on the collection of filing fees, miscellaneous charges, for the sale of lists of filings and copies of any documents. The filing of statements for the statements are statutorially authorized.

Bill Number: 
HB 2963
Public Act or Public Law Number: 
Public Act 100-0561
By: ATG Underwriting Department | Posted on: Wed, 04/18/2018 - 12:45pm