Hinch Law

What does "cause" mean?  In McManus v. Richards , an orthodontist was buying into a practice group, but four years into the buy-in contract, when she had paid for a 45% interest and was nearing equal partner status with the other orthodontist, she was fired for "cause."  The two doctors had apparently fallen out and the one buying in informed the other of her intent to dissociate from the practice, so she was fired preemptively.  She showed up to the office one morning, and the locks had been changed, computer passwords changed, and she was excluded access to patient records. As we often see with such ownership buy-in arrangements, there was a buy-in contract, but no separate employment contract.  The buy-in contract identified party rights to dissociate, voluntarily or in event of "cause," but "cause" was not defined.  The existing practice owner argued that in this case the word "cause" was merely as defined by the dictionary - ...

If you own an interest in an Illinois Limited Liability Company (LLC), good news!  Effective yesterday, certain filing fees have been significantly reduced.  See this press release from Secretary of State Jesse White's office for details as to the fee changes. If you have a current LLC, you are required to file Annual Reports with the State, and pay the annual filing fee associated with that.  This fee is being reduced from $250 to $75.  The fee is generally due on the anniversary of forming your LLC, which means the payment due date is different for each LLC.  The Secretary of State typically mails the Annual Report form out a few months in advance of the due date.   If your LLC annual report is due soon, you should doublecheck to ensure that you do not accidentally overpay the fee. For those who may have been holding off on forming a corporation or LLC due to cost concerns, this fee reduction is also great news! To file "Articles of Organizatio...

Get ready for changes to the Illinois LLC Act .  Last year a bill to amend the statute was signed into law, but with its effective date deferred to July 1, 2017, and is now less than a month away.  This is a significant update to the statute and may potentially affect existing LLCs; it is worth taking a look at an LLC's current Operating Agreement in light of the changes, to see if any updates are in order.  For a complete review of all the changes, see the text/markup of the statute here . There are many changes to the statute, but I'd like to focus on one, particularly significant change.  LLCs will now be able to designate certain members having authority to act for the company.  This is a very significant change; existing LLCs may wish to revisit their management structure and operating agreements to see whether they could benefit by utilizing this new process. As part of the application to file Articles of Organization, Illinois LLCs are required to de...