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Illinois Compiled Statutes

805 ILCS 180/15-3 (2026)

General standards of member and manager's conduct

✓ current as of May 2026
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(805 ILCS 180/15-3)
    Sec. 15-3. General standards of member and manager's conduct.
    (a) Without limiting any fiduciary duties owed at common law, 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) The implied contractual covenant of good faith and fair dealing applies to the operating agreement and members of a member-managed company in the same manner and to the same extent that it applies at law to other contracts and parties to the contracts.
    (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 who exercises some or all of the
    
authority of a manager in the conduct of the company's business is held to the standards of conduct in subsections (b), (c), (d), and (e) of this Section;
        (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; and
        (5) subsection (d) of this Section applies to the
    
operating agreement and members and managers of the company.
(Source: P.A. 102-230, eff. 1-1-22.)

    
Notes of Decisions
Cited in 16 cases (7 in the last 5 years), 2005–2025 · leading case: 800 South Wells Com. LLC v. Cadden, 2018 IL App (1st) 162882, 103 N.E.3d 875.
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800 South Wells Com. LLC v. Cadden, 2018 IL App (1st) 162882, 103 N.E.3d 875. · cites it 5× “Moreover, not only was defendant not plaintiff's manager, but he was not even one of its members.”
800 South Wells Com. LLC v. Cadden, 2018 IL App (1st) 162882. · cites it 3× “Accordingly, pursuant to section 15-1 of the Act, it is Gouletas who owed fiduciary duties to plaintiff, not defendant.”
Reinbold v. Kohansieh (In re Sandburg Mall Realty Mgmt. LLC), 563 B.R. 875 (Bankr. C.D. Ill. 2017). “As a preliminary matter, section 15-3 of the Illinois Limited Liability Company Act, 805 ILCS 180/15-3, defines the fiduciary duties owed by an LLC’s members and managers, drawing a distinction between member-managed companies and manager-managed companies.”
C.O.A.L., Inc. v. Dana Hotel, LLC, 2017 IL App (1st) 161048, 82 N.E.3d 1262. “See 805 ILCS 180/15-3 (West 2012). Plaintiff’s complaint also alleges a breach of fiduciary duty, as it alleges that defendant commingled funds between the LLC and defendant’s own accounts, diverted funds from the LLC into defendant’s accounts, and refused to permit plaintiff…”
Happy R Sec., LLC v. Agri-Sources, LLC, 2013 IL App (3d) 120509, 988 N.E.2d 972. · cites it 5× “805 ILCS 180/15-3 (West 2010). Standards that differ slightly are enumerated for members of both member-managed and manager-managed LLCs.”
C.O.A.L., Inc. v. Dana Hotel, LLC, 2017 IL App (1st) 161048. “Plaintiff’s complaint also alleges a breach of fiduciary duty, as it alleges that defendant commingled funds between the LLC and defendant’s own accounts, diverted funds from the LLC into defendant’s accounts, and refused to permit plaintiff access to the LLC’s books and records.”
Katris v. Carroll, No. 1-04-3639 Rel (Ill. App. Ct. 1st Dist. Dec. 23, 2005). · cites it 12× “Carroll and Ernst filed a motion for summary judgment asserting, inter alia , that Katris' collusion claim failed because Doherty, as a nonmanager member of the manager-managed LLC, did not owe Katris or the LLC a fiduciary duty under section 15-3(g) of the Act (805 ILCS…”
Oliver v. Isenberg, 2020 IL App (1st) 181551-U. “See 805 ILCS 180/15-3(g)(3) (West 2012) (“a member who exercises some or all of the authority of a manager and conduct of the company’s business is held to the standards of conduct [applicable to a manager]”).”
Tsai v. Karlik, 2021 IL App (1st) 182200-U. “Cadden, 2018 IL App (1st) 162882, ¶ 34 ; see 805 ILCS 180/15-3 (West 2018). ¶ 97 To succeed on a breach of fiduciary duty claim, the complainant must establish that a fiduciary duty existed, that duty was breached, and the breach proximately caused an injury to the complainant.”
Barus v. Siurek, 2021 IL App (2d) 200209-U. “805 ILCS 180/15-3(g) (West 2010) (stating that managers are held to the same standards of conduct prescribed for members in subsections (b), (c), and (d) of section 15-3 of the Act).”
Pistone v. Carl, 2020 IL App (1st) 181183-U. · cites it 4× “805 ILCS 180/15-3(a) (West 2014). The duty of loyalty entails: accounting for and holding in trust any property, profit, or benefit derived through the conduct of business, acting fairly when dealing with the company’s business, and refraining from competing with the company.”
Wolfson v. Dugout Northbrook, LLC, 2025 IL App (1st) 232257. · cites it 2× “805 ILCS 180/15-3(a) (West 2022). The duty of loyalty includes “account[ing] to the company and *** hold[ing] as trustee for it any property, profit, or benefit derived by the member in *** conduct[ing] *** the company’s business[,] or derived from a use by the member of the…”
Show all 16 citing cases →
805 ILCS 180/15-3(a): 5 cases
Happy R Sec., LLC v. Agri-Sources, LLC, 2013 IL App (3d) 120509, 988 N.E.2d 972. “805 ILCS 180/15-3 (West 2010). Standards that differ slightly are enumerated for members of both member-managed and manager-managed LLCs.”
Sidhu v. Morris Cancer Ctr., LLC, 2022 IL App (1st) 210034-U.
Nasrabadi v. Kameli, No. 1:18-cv-08514 (N.D. Ill. Feb. 22, 2023).
Pistone v. Carl, 2020 IL App (1st) 181183-U. “805 ILCS 180/15-3(a) (West 2014). The duty of loyalty entails: accounting for and holding in trust any property, profit, or benefit derived through the conduct of business, acting fairly when dealing with the company’s business, and refraining from competing with the company.”
Wolfson v. Dugout Northbrook, LLC, 2025 IL App (1st) 232257. “805 ILCS 180/15-3(a) (West 2022). The duty of loyalty includes “account[ing] to the company and *** hold[ing] as trustee for it any property, profit, or benefit derived by the member in *** conduct[ing] *** the company’s business[,] or derived from a use by the member of the…”
805 ILCS 180/15-3(b): 1 case
Pistone v. Carl, 2020 IL App (1st) 181183-U. “805 ILCS 180/15-3(a) (West 2014). The duty of loyalty entails: accounting for and holding in trust any property, profit, or benefit derived through the conduct of business, acting fairly when dealing with the company’s business, and refraining from competing with the company.”
805 ILCS 180/15-3(b)(2): 1 case
Happy R Sec., LLC v. Agri-Sources, LLC, 2013 IL App (3d) 120509, 988 N.E.2d 972. “805 ILCS 180/15-3 (West 2010). Standards that differ slightly are enumerated for members of both member-managed and manager-managed LLCs.”
805 ILCS 180/15-3(b)(3): 1 case
Wolfson v. Dugout Northbrook, LLC, 2025 IL App (1st) 232257. “805 ILCS 180/15-3(a) (West 2022). The duty of loyalty includes “account[ing] to the company and *** hold[ing] as trustee for it any property, profit, or benefit derived by the member in *** conduct[ing] *** the company’s business[,] or derived from a use by the member of the…”
805 ILCS 180/15-3(c): 2 cases
Pistone v. Carl, 2020 IL App (1st) 181183-U. “805 ILCS 180/15-3(a) (West 2014). The duty of loyalty entails: accounting for and holding in trust any property, profit, or benefit derived through the conduct of business, acting fairly when dealing with the company’s business, and refraining from competing with the company.”
Learco Hosp., LLC v. Comacchio, 2025 IL App (1st) 250258-U.
805 ILCS 180/15-3(d): 2 cases
Happy R Sec., LLC v. Agri-Sources, LLC, 2013 IL App (3d) 120509, 988 N.E.2d 972. “805 ILCS 180/15-3 (West 2010). Standards that differ slightly are enumerated for members of both member-managed and manager-managed LLCs.”
Pistone v. Carl, 2020 IL App (1st) 181183-U. “805 ILCS 180/15-3(a) (West 2014). The duty of loyalty entails: accounting for and holding in trust any property, profit, or benefit derived through the conduct of business, acting fairly when dealing with the company’s business, and refraining from competing with the company.”
805 ILCS 180/15-3(g): 3 cases
Barus v. Siurek, 2021 IL App (2d) 200209-U. “805 ILCS 180/15-3(g) (West 2010) (stating that managers are held to the same standards of conduct prescribed for members in subsections (b), (c), and (d) of section 15-3 of the Act).”
Katris v. Carroll, No. 1-04-3639 Rel (Ill. App. Ct. 1st Dist. Dec. 23, 2005). “Carroll and Ernst filed a motion for summary judgment asserting, inter alia , that Katris' collusion claim failed because Doherty, as a nonmanager member of the manager-managed LLC, did not owe Katris or the LLC a fiduciary duty under section 15-3(g) of the Act (805 ILCS…”
Aylin & Ramtin, LLC v. Barnhardt, No. 1:19-cv-03402 (N.D. Ill. Jan. 29, 2024).
805 ILCS 180/15-3(g)(1): 3 cases
800 South Wells Com. LLC v. Cadden, 2018 IL App (1st) 162882, 103 N.E.3d 875. “Moreover, not only was defendant not plaintiff's manager, but he was not even one of its members.”
800 South Wells Com. LLC v. Cadden, 2018 IL App (1st) 162882. “Accordingly, pursuant to section 15-1 of the Act, it is Gouletas who owed fiduciary duties to plaintiff, not defendant.”
Katris v. Carroll, No. 1-04-3639 Rel (Ill. App. Ct. 1st Dist. Dec. 23, 2005). “Carroll and Ernst filed a motion for summary judgment asserting, inter alia , that Katris' collusion claim failed because Doherty, as a nonmanager member of the manager-managed LLC, did not owe Katris or the LLC a fiduciary duty under section 15-3(g) of the Act (805 ILCS…”
805 ILCS 180/15-3(g)(3): 5 cases
800 South Wells Com. LLC v. Cadden, 2018 IL App (1st) 162882, 103 N.E.3d 875. “Moreover, not only was defendant not plaintiff's manager, but he was not even one of its members.”
800 South Wells Com. LLC v. Cadden, 2018 IL App (1st) 162882. “Accordingly, pursuant to section 15-1 of the Act, it is Gouletas who owed fiduciary duties to plaintiff, not defendant.”
Happy R Sec., LLC v. Agri-Sources, LLC, 2013 IL App (3d) 120509, 988 N.E.2d 972. “805 ILCS 180/15-3 (West 2010). Standards that differ slightly are enumerated for members of both member-managed and manager-managed LLCs.”
Oliver v. Isenberg, 2020 IL App (1st) 181551-U. “See 805 ILCS 180/15-3(g)(3) (West 2012) (“a member who exercises some or all of the authority of a manager and conduct of the company’s business is held to the standards of conduct [applicable to a manager]”).”
Katris v. Carroll, No. 1-04-3639 Rel (Ill. App. Ct. 1st Dist. Dec. 23, 2005). “Carroll and Ernst filed a motion for summary judgment asserting, inter alia , that Katris' collusion claim failed because Doherty, as a nonmanager member of the manager-managed LLC, did not owe Katris or the LLC a fiduciary duty under section 15-3(g) of the Act (805 ILCS…”
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