IL SB1795

Clarifies that fiduciary duties owed by LLC members at common law are not limited by statutory provisions and adds the implied contractual covenant of good faith and fair dealing to member-managed and manager-managed companies.

Prohibits operating agreements from restricting or eliminating fiduciary duties owed at common law or under the Act unless the restriction is clear and unambiguous, with specific exceptions for duty of care and duty of loyalty.

Allows operating agreements to identify specific types or categories of activities that do not violate fiduciary duties and to determine standards for measuring performance of fiduciary duties, subject to restrictions on eliminating core duties.

Permits operating agreements to specify methods for authorizing or ratifying acts that would otherwise violate the duty of loyalty through approval by all members or disinterested and independent members after full disclosure.

Applies changes to fiduciary duty provisions retroactively to any operating agreement entered before the effective date if fiduciary duties are modified on or after the effective date.