Illinois Compiled Statutes
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BUSINESS ORGANIZATIONS805 ILCS 105/Art. 3
(805 ILCS 105/) General Not For Profit Corporation Act of 1986.
(805 ILCS 105/Art. 3 heading)
PURPOSES AND POWERS
805 ILCS 105/103.05
(805 ILCS 105/103.05)
(from Ch. 32, par. 103.05)
Purposes and authority of corporations;
particular purposes; exemptions.
(a) Not-for-profit corporations may be organized under this Act for any
one or more of the following or similar purposes:
(16) Soil improvement.
(17) Crop improvement.
(18) Livestock or poultry improvement.
(19) Professional, commercial, industrial, or trade
(20) Promoting the development, establishment, or
(21) Electrification on a cooperative basis.
(22) Telephone service on a mutual or cooperative
(23) Ownership and operation of water supply
facilities for drinking and general domestic use on a mutual or cooperative basis.
(24) Ownership or administration of residential
property on a cooperative basis.
(25) Administration and operation of property owned
on a condominium basis or by a homeowner association.
(26) Administration and operation of an organization
on a cooperative basis producing or furnishing goods, services, or facilities primarily for the benefit of its members who are consumers of those goods, services, or facilities.
(27) Operation of a community mental health board or
center organized pursuant to the Community Mental Health Act for the purpose of providing direct patient services.
(28) Provision of debt management services as
authorized by the Debt Management Service Act.
(29) Promotion, operation, and administration of a
ridesharing arrangement as defined in Section 1-176.1 of the Illinois Vehicle Code.
(30) The administration and operation of an
organization for the purpose of assisting low-income consumers in the acquisition of utility and telephone services.
(31) Any purpose permitted to be exempt from taxation
under Sections 501(c) or 501(d) of the United States Internal Revenue Code, as now in or hereafter amended.
(32) Any purpose that would qualify for
tax-deductible gifts under the Section 170(c) of the United States Internal Revenue Code, as now or hereafter amended. Any such purpose is deemed to be charitable under subsection (a)(1) of this Section.
(33) Furnishing of natural gas on a cooperative
(34) Ownership and operation of agriculture-based
biogas (anaerobic digester) systems on a cooperative basis including the marketing and sale of products produced from these, including but not limited to methane gas, electricity, and compost.
(b) A corporation may be organized hereunder to serve in an
area that adjoins or borders (except for any intervening
natural watercourse) an area located in an adjoining state
intended to be similarly served, and the corporation may
join any corporation created by the adjoining state having
an identical purpose and organized as a not-for-profit
corporation. Whenever any corporation organized under this
Act so joins with a foreign corporation having an identical
purpose, the corporation shall be permitted to do business
in Illinois as one corporation; provided (1) that the name,
bylaw provisions, officers, and directors of each
corporation are identical, (2) that the foreign corporation
complies with the provisions of this Act relating to the
admission of foreign corporation, and (3) that the Illinois
corporation files a statement with the Secretary of State
indicating that it has joined with a foreign corporation
setting forth the name thereof and the state of its incorporation.
(Source: P.A. 98-317, eff. 8-12-13.)
805 ILCS 105/103.10
(805 ILCS 105/103.10)
(from Ch. 32, par. 103.10)
Each corporation shall
(a) To have perpetual succession by its corporate name
unless a limited period of duration is stated in its
articles of incorporation;
(b) To sue and be sued, complain and defend, in its
corporate name, and shall have standing to sue when one or more of
its members would otherwise have standing to sue in his or her own right,
providing the interests it seeks to protect are germane to the corporation's
purposes, and neither the claim asserted nor the relief requested requires the
participation of individual members in the lawsuit;
(c) To have a corporate seal which may be altered at
pleasure, and to use the same by causing it, or a facsimile
thereof, to be impressed or affixed or in any other manner
reproduced, provided that the affixing of a corporate seal
to an instrument shall not give the instrument additional
force or effect, or change the construction thereof, and the
use of a corporate seal is not mandatory;
(d) To purchase, take, receive, lease as lessee, take by
gift, devise, or bequest, or otherwise acquire, and to own,
hold, hold as trustee, use, and otherwise deal in and with
any real or personal property, or any interest therein,
situated in or out of this State;
(e) To sell and convey, mortgage, pledge, lease as lessor,
and otherwise dispose of all or any part of its property and
(f) To lend money to its officers, employees and agents except as
limited by Section 108.80 of this Act;
(g) To purchase, take, receive, subscribe for, or otherwise
acquire, own, hold, vote, use, employ, sell, mortgage, loan,
pledge, or otherwise dispose of, and otherwise use and deal
in and with, shares or other interests in, or obligations
of, other domestic or foreign corporations, whether for
profit or not for profit, associations, partnerships or
(h) To incur liabilities, to borrow money for its corporate
purposes at such rates of interest as the corporation may
determine without regard to the restrictions of any usury
law of this State, to issue its notes, bonds and other
obligations; to secure any of its obligations by mortgage,
pledge, or deed of trust of all or any of its property,
franchises, and income; and to make contracts, including
contracts of guaranty and suretyship;
(i) To invest its funds from time to time and to lend money
for its corporate purposes, and to take and hold real and
personal property as security for the payment of funds so
invested or loaned;
(j) To conduct its affairs, carry on its operations, and
have offices within and without this State and to exercise
in any other state, territory, district, or possession of
the United States, or in any foreign country, the powers
granted by this Act;
(k) To elect or appoint officers and agents of the
corporation, and define their duties and fix their
(l) To make and alter bylaws, not inconsistent with its
articles of incorporation or with the laws of this State,
except as provided in Section 102.30 of this Act, for the
administration and regulation of the affairs of the
(m) To make donations in furtherance of any of its
purposes; to lend money to the State or Federal government;
and to conduct any lawful affairs in aid of the United
(n) To cease its corporate activities and surrender its
(o) To establish deferred compensation plans, pension
plans, and other incentive plans for its directors, officers
and employees and to make the payments provided for therein;
(p) To indemnify its directors, officers, employees or
agents in accordance with and to the extent permitted by
Section 108.75 of this Act and other applicable provisions
(q) To be a promoter, partner, member, associate or manager
of any partnership, joint venture or other enterprise; and
(r) To have and exercise all powers necessary or convenient
to effect any or all of the purposes for which the
corporation is formed.
(Source: P.A. 90-203, eff. 7-24-97.)
805 ILCS 105/103.12
(805 ILCS 105/103.12)
(from Ch. 32, par. 103.12)
Private foundations - Federal tax laws.
the absence of an express provision to the contrary in its
articles of incorporation, a corporation, as defined in
Section 509 of the Internal Revenue Code of 1986, as may be amended from time to time, during the
period it is a private foundation:
(a) Shall not engage in any act of self-dealing as defined
in Section 4941(d) thereof;
(b) Shall distribute its income for each taxable year at
such time and in such manner as not to become subject to the
tax on undistributed income imposed by Section 4942 thereof;
(c) Shall not retain any excess business holdings as
defined in Section 4943(c) thereof;
(d) Shall not make any investment in such manner as to
subject it to tax under Section 4944 thereof;
(e) Shall not make any taxable expenditure as defined in
Section 4945(d) thereof.
(Source: P.A. 96-649, eff. 1-1-10.)
805 ILCS 105/103.15
(805 ILCS 105/103.15)
(from Ch. 32, par. 103.15)
Defense of Ultra Vires.
No act of a
corporation and no conveyance or transfer of real or
personal property to or by a corporation shall be invalid by
reason of the fact that the corporation was without capacity
or power to do such act or to make or receive such
conveyance or transfer, but such lack of capacity or power
may be asserted:
(a) In a proceeding by a member entitled to vote or by a
director against the corporation to enjoin the doing of any
act or acts or the transfer of real or personal property by
or to the corporation. If the unauthorized acts or transfer
sought to be enjoined are being, or are to be, performed or
made pursuant to any contract to which the corporation is a
party, the court may, if all of the parties to the contract
are parties to the proceeding and if it deems the same to be
equitable, set aside and enjoin the performance of such
contract, and in so doing shall allow to the corporation or
the other parties, as the case may be, compensation for the
loss or damage sustained by either of them which may result
from the action of the court in setting aside and enjoining
the performance of such contract, but anticipated profits to
be derived from the performance of the contract shall not be
awarded by the court as a loss or damage sustained;
(b) In a proceeding by the corporation, whether acting
directly or through a receiver, trustee, or other legal
representative, or, to the extent provided for by Section
107.80 of this Act, through a member in a representative
suit, against the officers or directors of the corporation
for exceeding their authority; or
(c) In a proceeding by the State, as provided in this Act,
to dissolve the corporation, or in a proceeding by the State
to enjoin the corporation from the transaction of
(Source: P.A. 84-1423.)
805 ILCS 105/103.20
(805 ILCS 105/103.20)
(from Ch. 32, par. 103.20)
Unauthorized assumption of corporate
powers. All persons who assume to exercise corporate powers
without authority to so do shall be jointly and severally
liable for all debts and liabilities incurred or arising as
a result thereof.
(Source: P.A. 84-1423.)
805 ILCS 105/103.25
(805 ILCS 105/103.25)
(a) A person shall not advertise or cause to be listed in a telephone
directory an assumed or fictitious business name that intentionally
misrepresents where the business is actually located or operating or falsely
states that the business is located or operating in the area covered by the
This subsection (a) does not apply to a telephone service provider or
to the publisher or distributor of a telephone service directory, unless the
conduct prescribed in this subsection (a) is on behalf of that telephone
service provider or that publisher or distributor.
(b) A foreign not-for-profit corporation that violates this Section is
guilty of a petty offense and must be fined not less than $501 and not more
than $1,000. A foreign not-for-profit corporation is guilty of an additional
offense for each additional day in violation of this Section.
(Source: P.A. 91-906, eff. 1-1-01.)
805 ILCS 105/103.30
(805 ILCS 105/103.30)
Homeowners' association; American flag or military flag.
(a) Notwithstanding any provision in the association's declaration,
bylaws, rules, regulations, or other instruments or any construction of any of
instruments by an association's board of directors, a homeowners' association
incorporated under this Act may not prohibit the outdoor display of the
American flag or a military flag, or both, by
a homeowner on that homeowner's property if the American flag is displayed in a
consistent with Sections 4 through 10 of Chapter 1 of Title 4 of the United
States Code and a military flag is displayed in accordance with any reasonable
rules and regulations
adopted by the association.
An association may adopt reasonable rules and regulations, consistent with
through 10 of Chapter 1 of Title 4 of the United States Code, regarding the
manner of display of the American flag and an association may adopt reasonable
rules and regulations regarding the placement and manner of display of a
military flag. An association may not prohibit the
of a flagpole for the display of the American flag or a military flag, or both,
but the association may
reasonable rules and regulations regarding the location and size of flagpoles.
(b) As used in this Section:
"American flag" means the flag of the United States (as defined in Section 1
Chapter 1 of Title 4 of the United States Code and the Executive Orders entered
connection with that Section) made of fabric, cloth, or paper displayed from a
flagpole or in a window, but "American flag" does not include a depiction or
the American flag made of lights, paint, roofing, siding, paving materials,
balloons, or any other similar building, landscaping, or decorative component.
"Homeowners' association" includes a property owners' association, townhome
association, and any similar entity, and "homeowner" includes a townhome
"Military flag" means a flag of any branch of the United States armed
the Illinois National Guard made of fabric, cloth, or paper displayed from a
flagpole or in a window, but "military flag" does not include a depiction or
emblem of a
military flag made of lights, paint, roofing, siding, paving materials, flora,
or balloons, or
similar building, landscaping, or decorative component.
(Source: P.A. 93-481, eff. 1-1-04.)
805 ILCS 105/103.35
(805 ILCS 105/103.35)
Unemployment insurance; notice.
A not-for-profit corporation that is excluded from the definition of "nonprofit organization" under Section 211.2 of the Unemployment Insurance Act because it does not have in employment 4 or more individuals within each of 20 or more calendar weeks must provide a written notice to each employee, either in each employee's employment contract or in a written notice provided to employees who do not have employment contracts, and to each member of the board of directors that the employees of the not-for-profit corporation are not eligible to receive unemployment insurance benefits on the basis of their employment for the not-for-profit corporation.
(Source: P.A. 96-970, eff. 1-1-11.)