Illinois § 35

§ 35.

Cooperative agreement. (a) A cooperative agreement shall include: (1) a statement of the capital structure of the limited worker cooperative association; (2) the classes or other types of members' interests and the relative rights, preferences, privileges, and restrictions granted to or imposed upon each class or other type of member's interest, including: (A) a statement concerning the manner in which profits and losses are allocated and distributions are made among members and, if community investors are authorized, the manner in which profits and losses are allocated and how distributions are made among investor members and between members and community investors; (B) a statement designating voting and other governance rights of each class or other type of members' interests and, if relevant, community investors, including which members have voting power and any restriction on voting power; (3) a statement of the method for admission of members; (4) a statement that a member's interest is transferable, if it is to be transferable, and a statement of the conditions upon which it may be transferred; (5) a statement concerning: (A) whether persons that are not members but conduct business with the association may be permitted to share in allocations of profits and losses and receive distributions; and (B) the manner in which profits and losses are allocated and distributions are made with respect to those persons; and (6) a statement of the number and terms of directors or the method by which the number and terms are determined; and (7) a statement addressing members' contributions. (b) A cooperative agreement may contain any other provision for managing and regulating the affairs of the association. (c) The cooperative agreement may not: (1) unreasonably restrict a right to information or access to records available under Section 1-40 or Section 10-15 of the Limited Liability Company Act; (2) vary the right to expel a member in an event specified in subdivision (6) of Section 35-45 of the Limited Liability Company Act; (3) vary the requirement to wind up the limited worker cooperative association's business in a case specified in subdivision (4), (5), or (6) of subsection (a) of Section 35-1 of the Limited Liability Company Act; (4) restrict rights of a person, other than a director, member, and transferee of a member's distributional interest, under this Act; (5) restrict the power of a member to dissociate under Section 35-50 of the Limited Liability Company Act, although a cooperative agreement may determine whether a dissociation is wrongful under Section 35-50 of the Limited Liability Company Act; (6) eliminate or reduce the obligation of good faith and fair dealing under subsection (d) of Section 15-3 of the Limited Liability Company Act, but the cooperative agreement may determine the standards by which the performance of the member's duties or the exercise of the member's rights is to be measured; (7) eliminate, vary, or restrict the priority of a statement of authority over provisions in the articles of organization as provided in subsection (h) of Section 13-15 of the Limited Liability Company Act; (8) vary the law applicable under Section 1-65 of the Limited Liability Company Act; (9) vary the power of the court under Section 5-50 of the Limited Liability Company Act; or (10) restrict the right to approve a merger, conversion, or domestication under Article 37 of the Limited Liability Company Act or the Entity Omnibus Act of a member that will have personal liability with respect to a surviving, converted, or domesticated organization. (d) The cooperative agreement may: (1) restrict or eliminate a fiduciary duty, other than the duty of care described in subsection (c) of Section 15-3 of the Limited Liability Company Act, but only to the extent the restriction or elimination in the cooperative agreement is clear and unambiguous; (2) identify specific types or categories of activities that do not violate any fiduciary duty; and (3) alter the duty of care, except to authorize intentional misconduct or knowing violation of law. (e) The cooperative agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts. (f) The cooperative agreement may alter or eliminate the right to payment or reimbursement for a member or director provided by Section 15-7 of the Limited Liability Company Act and may eliminate or limit a member's or director's liability to the limited worker cooperative association and members for money damages, except for: (1) subject to subsections (d) and (e) of this Section, breach of the duties as required in subdivisions (1), (2), and (3) of subsection (b) of Section 15-3 of the Limited Liability Company Act; (2) a financial benefit received by the member or director to which the member or director is not entitled; (3) a breach of a duty under Section 25-35 of the Limited Liability Company Act; (4) intentional infliction of harm on the association or a member; or (5) an intentional violation of criminal law. (g) A limited worker cooperative association is bound by and may enforce the cooperative agreement, whether or not the association has itself manifested assent to the cooperative agreement. (h) A person that becomes a member of a limited worker cooperative association is deemed to assent to the cooperative agreement. (i) A cooperative agreement may be entered into before, after, or at the time of filing of articles of organization and, whether entered into before, after, or at the time of the filing, may be made effective as of the time of formation of the limited worker cooperative association or as of the time or date provided in the cooperative agreement. (Source: P.A. 101-292, eff. 1-1-20; 102-351, eff. 8-13-21.)