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91_SB0249enr SB249 Enrolled LRB9101619SMdvA 1 AN ACT to amend the Illinois Business Brokers Act of 1995 2 by changing Sections 10-25 and 10-115. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Business Brokers Act of 1995 is 6 amended by changing Sections 10-25 and 10-115 as follows: 7 (815 ILCS 307/10-25) 8 Sec. 10-25. Fees and funds. All fees and funds accruing 9 for the administration of this Act shall be accounted for by 10 the Secretary of State and shall be deposited with the State 11 Treasurer who shall deposit them in the Securities Audit and 12 Enforcement Fund. 13 (a) The Secretary of State shall, by rule or regulation, 14 impose and collect fees necessary for the administration of 15 this Act, including but not limited to, fees for the 16 following purposes: 17 (1) Filing an application pursuant to Section 10-10 18 of this Act; 19 (2) Examining an application pursuant to Sections 20 10-10 and 10-20 of this Act; 21 (3) Registering a business broker under Section 22 10-10 of this Act; 23 (4) Renewing registration of a business broker 24 pursuant to Section 10-20 of this Act; 25 (5) Failure to file or file timely any document or 26 information required under this Act; 27 (6) Filing a notice of lien with the Secretary of 28 State pursuant to Section 10-115 of this Act. 29 (b) The Secretary of State may, by rule or regulation, 30 raise or lower any fee imposed by, and which he or she is 31 authorized by law to collect under, this Act. SB249 Enrolled -2- LRB9101619SMdvA 1 (Source: P.A. 89-209, eff. 1-1-96; 90-70, eff. 7-8-97.) 2 (815 ILCS 307/10-115) 3 Sec. 10-115. Business broker lien. 4 (a) Any business broker shall have a lien upon the 5 assets of a business that is the subject of a business 6 broker's contract and the proceeds from the sale of such 7 business in the amount that the broker is due. 8 (b) The lien shall be available to the business broker 9 named in the instrument signed by the seller or purchaser. 10 The lien arising under this Act shall be in addition to any 11 other rights that a business broker may have. 12 (c) The lien under this Act shall attach upon the 13 business broker being otherwise entitled to a fee or 14 commission under a written instrument signed by the seller or 15 purchaser or the seller or purchaser's duly authorized agent, 16 as applicable. 17 (d) When payment to a business broker is due in 18 installments, a portion of which is due only after the 19 conveyance or transfer of the business, any claim for lien 20 for those payments due after the transfer or conveyance may 21 be filed at any time subsequent to the transfer or conveyance 22 of the business and prior to the date on which the payment is 23 due but shall only be effective as a lien against the 24 business or proceeds to the extent moneys are still owed to 25 the transferor by the transferee. The lien shall attach as of 26 the filing of the notice of lien and not relate back to the 27 date of the written agreement. 28 (e) If a business broker has a written agreement with a 29 prospective purchaser or seller, then the lien shall attach 30 upon the prospective purchaser or seller that is purchasing, 31 selling, or otherwise accepting a conveyance or transfer of 32 the business and the filing of a notice of lien by the 33 business broker in the Office of the Secretary of State SB249 Enrolled -3- LRB9101619SMdvA 1 within 90 days after the purchase, sale, or other conveyance 2 or transfer of the business that is the subject of the 3 written agreement with the business broker. The lien shall 4 attach as of the date of the receipt of any consideration by 5 the seller of the business that is the subject of the written 6 agreement with the business broker. 7 (f) The business broker shall, within 10 days after 8 filing its notice of lien, mail a copy of the notice of lien 9 to the owner of the business by registered or certified mail, 10 with return receipt requested, or personally served on the 11 owner of record or his agent. If the lien is filed within 10 12 days prior to closing, the business broker is not required to 13 mail or personally serve a copy of the notice of lien. 14 Mailing of the copy of the notice of lien is effective if 15 mailed to the address of the business that is the subject of 16 the notice of lien, or to such other address as the seller or 17 purchaser has provided to the business broker in writing and 18 signed by the seller or purchaser. Mailing of the copy of 19 the notice of claim for lien is effective when deposited in a 20 United States mailbox with postage prepaid. The broker's 21 lien shall be unenforceable if mailing of the copy of the 22 notice of lien does not occur at the time and in the manner 23 required by this Act. 24 (g) A business broker may bring suit to enforce a lien 25 in the circuit court in the county where the headquarters of 26 the business being sold is located, where the purchaser 27 resides (or maintains its headquarters) if the lien is being 28 filed against the purchaser, or where the seller resides (or 29 maintains its headquarters) if the lien is filed against the 30 seller, by filing a complaint and sworn affidavit that the 31 lien has been filed. 32 (h) The person claiming a lien shall, within 2 years 33 after filing the lien, commence proceedings by filing a 34 complaint. Failure to commence proceedings within 2 years SB249 Enrolled -4- LRB9101619SMdvA 1 after filing the lien shall extinguish the lien. No 2 subsequent notice of lien may be given for the same claim nor 3 may that claim be asserted in any proceedings under this Act. 4 (i) A complaint under this Section shall contain a brief 5 statement of the contract or agreements on which the lien is 6 founded, the date when the contract or agreement was made, a 7 description of the services performed, the amount due and 8 unpaid, a description of the business that is, or the 9 proceeds from sale of which are, subject to the lien, and 10 other facts necessary for a full understanding of the rights 11 of the parties. The plaintiff shall make all interested 12 parties, of whose interest the plaintiff is notified or has 13 actual or constructive knowledge, defendants to the action 14 and shall issue summons and provide service as in other civil 15 actions. When any defendant resides or has gone out of the 16 State, or on inquiry cannot be found, or is concealed within 17 this State so that process cannot be served on that 18 defendant, the plaintiff shall cause a notice to be given to 19 that defendant, or cause a copy of the complaint to be served 20 upon that defendant, in the manner and upon the same 21 conditions as in other civil actions. Failure of the 22 plaintiff to provide proper summons or notice shall be 23 grounds for judgment against the plaintiff with prejudice. 24 (j) The lien notice shall state the name of the 25 claimant, the name of the purchaser or seller whose property 26 or assets are subject to the lien, a description of the 27 business upon which or upon the proceeds from the sale of 28 which the lien is being claimed, the amount for which the 29 lien is claimed, and the registration number of the business 30 broker. The notice of lien shall recite that the information 31 contained in the notice is true and accurate to the knowledge 32 of the signatory. The notice of lien shall be signed by the 33 business broker or by a person authorized to sign on behalf 34 of the business broker and shall be verified. SB249 Enrolled -5- LRB9101619SMdvA 1 (k) Whenever a claim for lien has been filed with the 2 Office of the Secretary of State and a condition occurs that 3 would preclude the business broker from receiving 4 compensation under the terms of the business broker's written 5 agreement, the business broker shall provide to the purchaser 6 of the business, if the lien is filed against the purchaser, 7 or the seller of the business, if the lien is filed against 8 the seller, within 10 days following demand by the owner of 9 record, a written release or satisfaction of the lien. 10 (l) Upon written demand of the owner, lienee, or other 11 authorized agent, served on the person claiming the lien 12 requiring suit to be commenced to enforce the lien or answer 13 to be filed in a pending suit, a suit shall be commenced or 14 answer filed within 30 days thereafter, or the lien shall be 15 extinguished. Service may be by registered or certified 16 mail, return receipt requested, or by personal service. 17 (m) If a claim for lien has been filed with the 18 Secretary of State and is paid, or if there is failure to 19 institute a suit to enforce the lien within the time provided 20 by this Act, the business broker shall acknowledge 21 satisfaction or release of the lien, in writing, on written 22 demand of the purchaser of the business, if the lien is filed 23 against the purchaser, or the seller of the business, if the 24 lien is filed against the seller, within 5 days after payment 25 or expiration of the time in which to file the lien. 26 (n) The cost of proceedings asserting or defending a 27 business broker's claim of lien, including reasonable 28 attorneys' fees, costs, and prejudgment interests due to the 29 prevailing party, shall be borne by the nonprevailing party 30 or parties. When more than one party is responsible for 31 costs, fees, and prejudgment interest, the costs, fees, and 32 prejudgment interest shall be equitably apportioned by the 33 court among those responsible parties. 34 (o) Prior recorded liens and mortgages shall have SB249 Enrolled -6- LRB9101619SMdvA 1 priority over a broker's lien. A prior recorded lien shall 2 include, without limitation, (i) a valid mechanic's lien 3 claim that is recorded subsequent to the broker's notice of 4 lien but which relates back to a date prior to the recording 5 date of the broker's notice of lien and (ii) prior recorded 6 liens securing revolving credit and future advances of 7 construction loans as described in Section 15-1302 of the 8 Code of Civil Procedure. 9 (p) No lien under this Section 10-115 shall attach to 10 any real property asset of a business unless and until a 11 notice of lien is filed with the recorder of the county in 12 which the real property asset is located. A lien recorded 13 under this subsection (p) shall otherwise be subject to the 14 same notice, enforcement, and limitations as any other lien 15 under this Section. A copy of the notice of lien recorded 16 under this subsection (p) shall be filed with the Secretary 17 of State. 18 (Source: P.A. 90-70, eff. 7-8-97.) 19 Section 99. Effective date. This Act takes effect upon 20 becoming law.