Illinois General Assembly - Illinois Compiled Statutes

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805 ILCS 5/9.05

(805 ILCS 5/9.05) (from Ch. 32, par. 9.05)

Sec. 9.05. Power of corporation to acquire its own shares.

(a) A corporation may acquire its own shares, subject to limitations set
forth in Section 9.10 of this Act.

(b) If a corporation acquires its own shares after the effective date of
this amendatory Act of 1993, the shares constitute treasury shares
until cancelled as provided by subsection (d) of this Section.

(c) A corporation shall file a report under Section 14.25 of this
Act in the case of its acquisition of its own shares that occurs
either prior to January 1, 1991 or on or prior to the last day of the third
month immediately preceding the corporation's anniversary month in 1991.  A
corporation shall file a report under Section 14.30 of this Act in the case
of its acquisition and cancellation of its own shares that occurs after
both December 31, 1990 and the last day of such third month.  However, if the articles of incorporation provide that
the
number of authorized shares is reduced by an acquisition and cancellation
of shares, then the corporation shall, within 60 days after the date of
acquisition, execute and file in duplicate in accordance with Section 1.10 of
this Act, a statement of cancellation which sets forth:

(1) The name of the corporation.

(2) The aggregate number of shares which the

corporation has authority to issue, itemized by classes and series, if any, within a class before giving effect to the cancellation.

(3) The aggregate number of issued shares, itemized

by classes and series, if any, within a class before giving effect to the cancellation.

(4) The number of shares cancelled, itemized by

classes and series, if any, within a class.

(5) The aggregate number of shares which the

corporation has the authority to issue, itemized by classes and series, if any, within a class after giving effect to the cancellation.

(6) The aggregate number of issued shares, itemized

by classes and series, if any, within a class, after giving effect to the cancellation.

(7) A statement, expressed in dollars, of the amount

of the paid-in capital of the corporation before giving effect to the cancellation.

(8) A statement, expressed in dollars, of the amount

of the paid-in capital of the corporation after giving effect to the cancellation.

Upon the filing of the statement of cancellation by the
Secretary of State, the paid-in
capital of the corporation shall be deemed to be reduced by that part of
the paid-in capital which was, at the time of the cancellation,
represented by the shares so cancelled, to the extent of the cost from the paid-in capital of the reacquired and cancelled shares or a lesser amount as may be elected by the corporation, and the statement of cancellation
shall operate as an amendment to the articles of incorporation so as to
reduce the number of authorized shares by the number of shares so cancelled.

(d) A corporation, by resolution of the board of directors, may cancel any
of its treasury shares.  When cancelled, the shares shall constitute authorized
but unissued shares unless the articles of incorporation provide that the
shares shall not be reissued, in which case the number of authorized shares
shall be reduced by the number of shares cancelled.

(e) Until the report required by subsection (c) of this Section, or
the report required by Section 14.25 or Section 14.30 of this Act
reporting a reduction in paid-in capital, shall have been filed in
the office of the Secretary of State, the basis of the annual franchise tax
payable by the corporation shall not be reduced, provided, however, in no
event shall the annual franchise tax for any taxable year be reduced if
such report is not filed prior to the first day of the anniversary month
or, in the case of a corporation which has established an extended
filing month, the extended filing month of that taxable year and before
payment of its annual franchise tax.

(Source: P.A. 94-605, eff. 1-1-06.)