(215 ILCS 5/32) (from Ch. 73, par. 644)
(Section scheduled to be repealed on January 1, 2027)
Sec. 32.
Increase in capital.
(1) Any company subject to this Article may increase its paid-up
capital either by issuing additional shares not to exceed the number of
authorized shares as set forth in its Articles or by increasing the par
value of its shares. No company shall issue additional shares nor increase
the par value of its shares without first procuring from the Director a
permit so to do, which permit shall expire one year from its date.
If the proposed increase in capital is part of a series of transactions that
includes subsequent transactions that will be subject to Article VIII 1/2, the
company shall provide the Director all of the information called for in Article
VIII 1/2 prior to the Director's issuance of a permit. The Director may
decline to issue a permit if the Director is not satisfied that the proposed
series of transactions satisfies the standards established in Article VIII
1/2.
The Director, upon compliance by the company with the applicable
provisions of this Code, and such reasonable regulations relating to the
offering, issuance, subscription or sale of or for shares as may be
promulgated by the Director to the end that no inequity, fraud or deceit
may be worked or tend to be worked upon prospective subscribers to,
recipients or purchasers of shares or present holders thereof, shall issue
a permit to the company to issue additional shares upon receipt of a copy
of a resolution by the Board of Directors authorizing the issuance of such
shares.
If preferred shares having a right of conversion to common shares are to be
issued, the terms and conditions on which the shares may be converted shall be
provided to the Director before a permit may be issued pursuant to this
Section.
In the case of shares to be issued for sale, the permit shall authorize
the company to solicit subscriptions to such shares on a form of
subscription agreement which shall have been submitted to and approved by
the Director.
All of the provisions of this Code relative to the filing, terms and
effect of subscription agreements, payment for shares, the limitations of
expenses, filing of bonds except that no bonds shall be required when a
company issues stock to its sole shareholder, deposit of proceeds of
shares, return of funds
in the event the payment for all of the additional shares is not completed,
and qualification or registration shall apply to the same extent and effect
as if the additional shares were shares representing the original capital
of a company being organized under this Article, except that no
organization bond with regard to costs incurred in connection with
liquidation or dissolution shall be required, and if the subscription
agreement provides for payment in installments, such installments shall not
extend beyond one year from date of the permit of the Director.
If shares are to be issued as a stock dividend, or if the par value of
shares is to be increased, the permit shall authorize the company to pay
for such additional shares or increase in par value by transferring the
requisite amount of surplus to paid-up capital provided, however, no
transfer of such surplus shall be made which will reduce the remaining
surplus to less than the surplus required by Section 13. In the case of
an increase in par value, the
company may require each shareholder to surrender his or her certificate
and to
accept in lieu thereof a new certificate conforming to such increase in par
value.
No more than one permit of the types under this Section may be
outstanding in the name of any company at any time.
(2) When the Director is notified that the additional shares proposed to
be issued have, or that the increase in par value has, been fully paid, and
that all of the requirements of the permit have been satisfied, he or she
shall
make an examination of the company and if he or she finds that the
provisions of
this Section have been complied with, he or she shall issue a certificate
of
paid-up capital to that effect which shall be filed with the recorder of
the county in which the principal office of the company is located
within 15 days from the date of said certificate. Upon the issuance of such
certificate, the company may withdraw the proceeds of the sale, if any, of
its shares and the bond, conditioned upon the full and complete accounting
by the company for the proceeds of any such sale of shares, shall terminate
or the cash deposited with the Director in lieu of such bond shall be
returned.
(3) If the Director finds that any company has failed to comply with, or
has violated any provision of the Code or any regulation promulgated under
subsection (1), he or she may, in addition to and notwithstanding any other
procedure, remedy or penalty provided under the laws of this State, after
notice and hearing, revoke the permit issued to it under subsection (1).
(Source: P.A. 90-381, eff. 8-14-97 .)
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