Illinois Compiled Statutes
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BUSINESS ORGANIZATIONS805 ILCS 5/1.80
(805 ILCS 5/) Business Corporation Act of 1983.
(805 ILCS 5/1.80)
(from Ch. 32, par. 1.80)
As used in this Act, unless the context
otherwise requires, the words and phrases defined in this Section shall
have the meanings set forth herein.
(a) "Corporation" or "domestic corporation" means a corporation
subject to the provisions of this Act, except a foreign corporation.
(b) "Foreign corporation" means a corporation for profit organized under
laws other than the laws of this State, but shall not include a banking
corporation organized under the laws of another state or of the United States,
banking corporation organized under the laws of a country other than the
United States and holding a certificate of authority from the Commissioner
of Banks and Real Estate issued pursuant to the Foreign
Banking Office Act, or a banking corporation holding a license from the
Commissioner of Banks and Real Estate issued pursuant to the Foreign Bank
Representative Office Act.
(c) "Articles of incorporation" means the original articles of
incorporation, including the articles of incorporation of a new corporation
set forth in the articles of consolidation, and all amendments thereto,
whether evidenced by articles of amendment, articles of merger, articles
of exchange, statement of correction affecting articles, resolution
establishing series of shares or a statement of cancellation under Section
9.05. Restated articles of incorporation shall supersede the original
articles of incorporation and all amendments thereto prior to the effective
date of filing the articles of amendment incorporating the restated
articles of incorporation.
(d) "Subscriber" means one who subscribes for shares in a
corporation, whether before or after incorporation.
(e) "Incorporator" means one of the signers of
the original articles of incorporation.
(f) "Shares" means the units into which the proprietary interests in
a corporation are divided.
(g) "Shareholder" means one who is a holder of record of shares in a
(h) "Certificate" representing shares means a written instrument executed
by the proper corporate officers, as required by Section 6.35 of this Act,
evidencing the fact that the person therein named is the holder of record
of the share or shares therein described. If the corporation is authorized
to issue uncertificated shares in accordance with Section 6.35 of this Act,
any reference in this Act to shares represented by a certificate shall also
refer to uncertificated shares and any reference to a certificate representing
shares shall also refer to the written notice in lieu of a certificate provided
for in Section 6.35.
(i) "Authorized shares" means the aggregate number of shares
of all classes which the corporation is authorized to issue.
(j) "Paid-in capital" means the sum of the cash and other consideration
received, less expenses, including commissions, paid or incurred by the
corporation, in connection with the issuance of shares, plus any cash and
other consideration contributed to the corporation by or on behalf of its
shareholders, plus amounts added or transferred to paid-in capital by
action of the board of directors or shareholders pursuant to a share
dividend, share split, or otherwise, minus reductions as provided elsewhere
in this Act. Irrespective of the manner of
designation thereof by the laws under which a foreign corporation is or may be
organized, paid-in capital of a foreign corporation shall be determined on the
same basis and in the same manner as paid-in capital of a domestic corporation,
for the purpose of computing license fees, franchise taxes and other charges
imposed by this Act.
(k) "Net assets", for the purpose of determining the right of a corporation
to purchase its own shares and of determining the right of a corporation
to declare and pay dividends and make other distributions to shareholders
is equal to the difference between the assets of the corporation and the
liabilities of the corporation.
(l) "Registered office" means that office maintained by the corporation
in this State, the address of which is on file in the office of
the Secretary of State, at which any process, notice or demand required
or permitted by law may be served upon the registered agent of the corporation.
(m) "Insolvent" means that a corporation is unable to pay its debts
as they become due in the usual course of its business.
(n) "Anniversary" means that day each year exactly one or more years after:
(1) the date of filing the articles of incorporation
prescribed by Section 2.10 of this Act, in the case of a domestic corporation;
(2) the date of filing the application for authority
prescribed by Section 13.15 of this Act, in the case of a foreign corporation; or
(3) the date of filing the articles of consolidation
prescribed by Section 11.25 of this Act in the case of a consolidation, unless the plan of consolidation provides for a delayed effective date, pursuant to Section 11.40.
(o) "Anniversary month" means the month in which the anniversary of the
(p) "Extended filing month" means the month (if any) which shall have
been established in lieu of the corporation's anniversary month in
accordance with Section 14.01.
(q) "Taxable year" means that 12 month period commencing with the first
day of the anniversary month of a corporation through the last day of the
month immediately preceding the next occurrence of the anniversary
month of the corporation, except that in the case of a
corporation that has established an extended filing month "taxable year"
means that 12 month period commencing with the first day of the extended
filing month through the last day of the month immediately preceding
the next occurrence of the
extended filing month.
(r) "Fiscal year" means the 12 month period with respect to which a
corporation ordinarily files its federal income tax return.
(s) "Close corporation" means a corporation organized under or electing
to be subject to Article 2A of this Act, the articles of incorporation of
which contain the provisions required by Section 2.10, and either the
corporation's articles of incorporation or an agreement entered into by all
of its shareholders provide that all of the issued shares of each class
shall be subject to one or more of the restrictions on transfer set forth
in Section 6.55 of this Act.
(t) "Common shares" means shares which have no preference over any other
shares with respect to distribution of assets on liquidation or with respect
to payment of dividends.
(u) "Delivered", for the purpose of determining if any notice required
by this Act is effective, means:
(1) transferred or presented to someone in person; or
(2) deposited in the United States Mail addressed to
the person at his, her or its address as it appears on the records of the corporation, with sufficient first-class postage prepaid thereon.
(v) "Property" means gross assets including, without limitation, all
real, personal, tangible, and intangible property.
(w) "Taxable period" means that 12-month period commencing with the
first day of the second month preceding the corporation's anniversary month
in the preceding year and prior to the first day of the second month
immediately preceding its anniversary month in the current year, except
that, in the case of a corporation that has established an extended filing
month, "taxable period" means that 12-month period ending with the last day
of its fiscal year immediately preceding the extended filing month.
In the case of a newly formed domestic corporation or a newly registered
foreign corporation that had not commenced transacting business in this State
prior to obtaining authority, "taxable period" means that
period commencing with the filing of the articles of incorporation or, in
the case of a foreign corporation, of filing of the application for authority, and prior
to the first day of the second month immediately preceding its anniversary
in the next succeeding year.
(x) "Treasury shares" mean (1) shares of a corporation that have been
issued, have been subsequently acquired by and belong to the corporation, and
have not been cancelled or restored to the status of authorized but unissued
shares and (2) shares (i) declared and paid as a share dividend on the shares
referred to in clause (1) or this clause (2), or (ii) issued in a share split
of the shares referred to in clause (1) or this clause (2). Treasury shares
shall be deemed to be "issued" shares but not "outstanding" shares. Treasury
shares may not be voted, directly or indirectly, at any meeting or otherwise.
Shares converted into or exchanged for other shares of the corporation shall
not be deemed to be treasury shares.
(y) "Gross amount of business" means gross receipts, from whatever source derived.
(z) "Open data" means data that is expressed in a machine-readable form and that is made freely available to the public under an open license, without registration requirement, and without any other restrictions that would impede its use or reuse.
(Source: P.A. 102-49, eff. 1-1-22
805 ILCS 5/Art. 2
(805 ILCS 5/Art. 2 heading)
FORMATION OF CORPORATIONS
805 ILCS 5/2.05
(805 ILCS 5/2.05)
(from Ch. 32, par. 2.05)
(a) One or more incorporators may organize a
corporation under this Act. Each incorporator shall be either a corporation,
domestic or foreign, or a natural person of the age of 18 years or more.
(b) Unless otherwise provided in the articles of incorporation, any
action as provided in Section 2.20, Section 10.10 and Section 12.05 to be
taken by the incorporators of a corporation, may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be
signed by all the incorporators.
(Source: P.A. 84-924.)
805 ILCS 5/2.10
(805 ILCS 5/2.10)
(from Ch. 32, par. 2.10)
Articles of Incorporation.
The articles of incorporation
shall be executed and filed in duplicate in accordance with Section 1.10 of
(a) The articles of incorporation must set forth:
(1) a corporate name for the corporation that
satisfies the requirements of this Act;
(2) the purpose or purposes for which the corporation
is organized, which may be stated to be, or to include, the transaction of any or all lawful businesses for which corporations may be incorporated under this Act;
(3) the address of the corporation's initial
registered office and the name of its initial registered agent at that office;
(4) the name and address of each incorporator;
(5) the number of shares of each class the
corporation is authorized to issue;
(6) the number and class of shares which the
corporation proposes to issue without further report to the Secretary of State, and the consideration to be received, less expenses, including commissions, paid or incurred in connection with the issuance of shares, by the corporation therefor. If shares of more than one class are to be issued, the consideration for shares of each class shall be separately stated;
(7) if the shares are divided into classes, the
designation of each class and a statement of the designations, preferences, qualifications, limitations, restrictions, and special or relative rights with respect to the shares of each class; and
(8) if the corporation may issue the shares of any
preferred or special class in series, then the designation of each series and a statement of the variations in the relative rights and preferences of the different series, if the same are fixed in the articles of incorporation, or a statement of the authority vested in the board of directors to establish series and determine the variations in the relative rights and preferences of the different series.
(b) The articles of incorporation may set forth:
(1) the names and addresses of the individuals who
are to serve as the initial directors;
(2) provisions not inconsistent with law with respect
(i) managing the business and regulating the
affairs of the corporation;
(ii) defining, limiting, and regulating the
rights, powers and duties of the corporation, its officers, directors and shareholders;
(iii) authorizing and limiting the preemptive
right of a shareholder to acquire shares, whether then or thereafter authorized;
(iv) an estimate, expressed in dollars, of the
value of all the property to be owned by the corporation for the following year, wherever located, and an estimate of the value of the property to be located within this State during such year, and an estimate, expressed in dollars, of the gross amount of business which will be transacted by it during such year and an estimate of the gross amount thereof which will be transacted by it at or from places of business in this State during such year; or
(v) superseding any provision of this Act that
requires for approval of corporate action a two-thirds vote of the shareholders by specifying any smaller or larger vote requirement not less than a majority of the outstanding shares entitled to vote on the matter and not less than a majority of the outstanding shares of each class of shares entitled to vote as a class on the matter.
(3) a provision eliminating or limiting the personal
liability of a director to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided that the provision does not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its shareholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 8.65 of this Act, or (iv) for any transaction from which the director derived an improper personal benefit. No such provision shall eliminate or limit the liability of a director for any act or omission occurring before the date when the provision becomes effective.
(4) any provision that under this Act is required or
permitted to be set forth in the articles of incorporation or by-laws.
(c) The articles of incorporation need not set forth any of the corporate
powers enumerated in this Act.
(d) The duration of a corporation is perpetual unless otherwise specified
in the articles of incorporation.
(e) If the data to which reference is made in subparagraph (iv) of
paragraph (2) of subsection (b) of this Section is not included in the articles
of incorporation, the franchise tax provided for in this Act shall be computed
on the basis of the entire paid-in capital as set forth pursuant to paragraph
(6) of subsection (a) of this Section, until such time as the data to which
reference is made in subparagraph (iv) of paragraph (2) of subsection (b) is
provided in accordance with either Section 14.05 or Section 14.25 of this Act.
When the provisions of this Section have been complied with, the Secretary
of State shall file the articles of incorporation.
(Source: P.A. 92-33, eff. 7-1-01; 93-59, eff. 7-1-03.)
805 ILCS 5/2.15
(805 ILCS 5/2.15)
(from Ch. 32, par. 2.15)
Effect of incorporation.
Upon the filing of the articles of
incorporation by the Secretary
of State, the corporate existence shall begin, and such filing shall be
conclusive evidence, except as against the State,
that all conditions precedent required to be performed by the incorporators
have been complied with and that the corporation has been incorporated
under this Act.
(Source: P.A. 92-33, eff. 7-1-01.)
805 ILCS 5/2.20
(805 ILCS 5/2.20)
(from Ch. 32, par. 2.20)
Organization of Corporation.
(a) If there are no
subscribers and if initial directors are not named in the articles of
a meeting of the incorporators shall be held at the call of
a majority of the incorporators for the purpose of naming the initial
(b) If there are preincorporation subscribers and if initial directors
are not named in the articles of incorporation, the first meeting of
shall be held after the filing of the articles of incorporation at
the call of a majority of the incorporators for the purpose of:
(1) electing initial directors;
(2) adopting by-laws if the articles of incorporation
so require or the shareholders so determine;
(3) such other matters as shall be stated in the
(4) In lieu of a meeting, shareholder action may be
taken by consent in writing pursuant to Section 7.10 of this Act.
(c) The first meeting of the initial directors shall be held at the call
of the majority of them for the purpose of:
(1) adopting by-laws if the shareholders have not
(2) electing officers; and
(3) transacting such other business as may come
(d) At least three days written notice of an organizational meeting shall
be given unless the persons entitled to such notice waive the same in writing,
either before or after such meeting. An organizational meeting may be held
either within or without this State.
(Source: P.A. 92-33, eff. 7-1-01.)
805 ILCS 5/2.25
(805 ILCS 5/2.25)
(from Ch. 32, par. 2.25)
Unless the power to make, alter, amend or repeal the by-laws is reserved
to the shareholders by the articles of incorporation, the by-laws of the
corporation may be made, altered, amended or repealed by the shareholders
or the board of directors, but no by-law adopted by the shareholders
may be altered, amended or repealed by the board of directors if the by-laws
so provide. The by-laws may contain
any provisions for the regulation and management of the affairs of the
corporation not inconsistent with law or the articles of incorporation.
(Source: P.A. 83-1025.)
805 ILCS 5/2.30
(805 ILCS 5/2.30)
(from Ch. 32, par. 2.30)
The board of directors of any corporation, subject to approval by not
less than a majority of the shares voting on the proposal, may adopt
emergency by-laws, subject to repeal or change by action of the
shareholders, which, to the extent therein provided and notwithstanding any
different provisions elsewhere in this Act or in the articles of
incorporation or by-laws, shall be operative upon (a) the declaration of a
civil defense emergency by the President of the United States or by
concurrent resolution of the Congress of the United States pursuant to
Title 50, Appendix, Section 2291 of the United States Code, or any
amendment thereof, or (b) upon a proclamation of a civil defense emergency
by the Governor of the State of Illinois which relates to an attack or
imminent attack on the United States or any of its possessions. Such
emergency by-laws shall cease to be effective and shall be suspended upon
any proclamation by the President of the United States, or the passage by
the Congress of a concurrent resolution, or any declaration by the Governor
of Illinois that such civil defense emergency no longer exists.
Emergency by-laws adopted pursuant to this Act may contain such
provisions as may be deemed practical and necessary for the interim
management of the affairs of the corporation, including, without
limitation, provisions with respect to the number of directors or
shareholders who shall constitute a quorum at a meeting of the board of
directors or the shareholders, the number of votes necessary for action by
such board or by the shareholders, the procedure for holding a special
election of directors and the procedure for calling and holding meetings of
shareholders or directors. No officer, director or employee shall be liable
for any action taken by him in good faith in such an emergency to protect
or preserve assets of the corporation endangered by the existence of such
emergency even though not authorized by the by-laws then in effect.
Notwithstanding anything contained herein to the contrary, emergency
by-laws adopted pursuant to this Act shall not supersede the regular
by-laws of the corporation, the articles of incorporation or the provisions
of this Act, in respect to amending the articles of incorporation or the
regular by-laws of the corporation, adopting a plan of merger, consolidation
or exchange of shares with another corporation or
corporations, authorizing the
sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the corporation other than
in the usual and regular course of business, authorizing a liquidating
dividend, or authorizing the dissolution of the corporation; and the
regular by-laws of the corporation, the articles of incorporation and the
provisions of this Act shall continue in full force and effect for such
(Source: P.A. 85-1269.)