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We are a little more than half-way through a year that has presented business owners with some of their most formidable challenges.  In fact, in 2020, the pandemic has bombarded business owners’ attention spans unlike no prior year.  So, it may come as a surprise to some that Illinois’ Limited Liability Company Act has changed.  Substantially.

As you will recall, for many years, Illinois courts had maintained that an LLC member or manager could not be held liable for torts he or she personally committed while acting pursuant to his or her role within the business.

On January 1, 2020 that changed.  Liability protection dissolved when the Illinois General Assembly amended the State’s Limited Liability Company Act. This change has eliminated the legal indemnity previously offered to Illinois LLC members and managers.

Prior to the beginning of this year, Illinois LLC members and managers were shielded from civil liability for their tortious acts.  The status quo for Illinois LLC members and managers was a guarantee of broad, wide-reaching protections that shielded them from liability, provided that they were acting on behalf of their businesses.

As of January 1, 2020, the legal indemnity that LLC members and managers enjoyed vanished, with the amendment of the Illinois Limited Liability Company Act. The amended language now clearly states that members and managers of an LLC may be liable for tortious conduct, despite the fact that their wrongful acts or omissions may have been carried out on their LLC’s behalf.

As a result of the amended Limited Liability Company Act, LLC members and managers should carefully police their conduct when acting on behalf of their businesses.  You should consider moving the LLC to another state.  We can help you analyze your situation.  Please contact Johnson & Bell Shareholder, Mark D. Belongia, or Attorney, Daniel R. Ahasay, with any questions.

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