Illinois Partnership Agreement

An Illinois partnership agreement details the type of partnership, each partner’s identity and roles, and business activities of a partnership. Virtually any partnership benefits from producing a well-crafted agreement because this provides a stable and reliable method of running the business.

Last updated December 20th, 2024

An Illinois partnership agreement details the type of partnership, each partner’s identity and roles, and business activities of a partnership. Virtually any partnership benefits from producing a well-crafted agreement because this provides a stable and reliable method of running the business.

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Illinois Partnership Types (4)

Partnership Type State Filing Requirement
General Partnership (GP) Statement Of Partnership Authority ($25.00)
Limited Partnership (LP) Certificate of Limited Partnership ($150.00)
Application for Certificate of Authority ($150.00)
Limited Liability Partnership (LLP) Statement of Qualification ($100.00 per partner)
Limited Liability Limited Partnership (LLLP) Certificate of Limited Partnership ($150.00)
Statement of Qualification ($100.00 per partner)

Fiduciary Duty

Duty Of Loyalty:

  • Partners must specifically “account to the partnership” all received benefits or profits and property resulting from the partnership or the partnership’s property.[1]
  • Illinois explicitly expects partners “to act fairly” with the partnership and on its behalf by not pursuing interests that interfere with or harm its business. [2]
  • Partners avoid competing with the “partnership business” until it has dissolved.[3]

Duty of Care:

  • Partners must avoid “intentional” misconduct and negligence as well as remain lawful while representing the partnership or working for it. (c) [4]
  • Partners in an Illinois partnership entity must “exercise” their rights with “fair dealing” and act in “good faith” while engaging in the partnership’s business. (d) [5]
  • Partners are forbidden from violating a partnership “duty or obligation” in order to further their interests (e) [7]

Liability

Partnerships hold “loss or injury” liability that they cause to an individual, especially through their conduct, wrong acts, or omissions.[8]

Partners cause their partnership to be significantly liable for the loss of any property or money received from a “person not a partner” misused or misapplied by a partner. (b) [9]

Partners in a general partnership hold the liability and obligations laid upon their partnership unless otherwise “provided by law” (a) [10]

A partner’s liability to a partnership begins with their admittance or whenever they register their partnership; however, newly admitted partners do not hold liabilities to an “existing partnership’s” obligations incurred before their admittance. (b) [11]

Limited liability partnerships protect their partners from assuming liability “directly or indirectly, by way of contribution or otherwise” that arises from completing their partnership duties according to their partnership agreement.[12]

State Definitions (9)

Partner means a person that is either a “limited partner or a “general partner” in a partnership. [13]
General partner means a person that is identified as such “under section 401” thus carrying duties for the partnership’s management and liabilities. [14]
Limited partner means a person who “becomes a limited partner” as per Section 301 as well as  one who is admitted to a partnership by vote after its formation. [15]
Partnership means an association of 2 or more persons to carry on as co-owners a business for profit formed under Section 202 of this Act, predecessor law, or comparable law of another jurisdiction. [16]
Limited partnership means an entity that is a partnership of “two or more people” with at least one general and one limited partner. [17]
Limited liability partnership means a partnership with a successful statement of qualification filed with Illinois and, specifically, “does not have a similar” effective statement outside Illinois state’s jurisdiction. [18]
Limited liability limited partnership means a domestically formed limited partnership that explicitly “states the limited partnership is a limited liability partnership” on its certificate of limited partnership. [19]
Foreign limited partnership means a partnership that originated “under the laws of a jurisdiction other than this State” so long as the other jurisdiction’s laws require the entity to have at least one general and at least one limited partner. [20]
Foreign limited liability limited partnership means a limited partnership outside the state of Illinois that offers partial protection or limited liability to its general and limited partners accordingly and operates under laws resembling Section 404 (c). [21]