PocketLaw | Illinois Compiled Statutes | Formation Of Corporations

Formation Of Corporations

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(805 ILCS 5/Art. 2 heading)

ARTICLE 2. FORMATION OF CORPORATIONS

(805 ILCS 5/2.05) (from Ch. 32, par. 2.05)

Sec. 2.05. Incorporators. (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) (from Ch. 32, par. 2.10)

Sec. 2.10. Articles of Incorporation. The articles of incorporation shall be executed and filed in duplicate in accordance with Section 1.10 of this Act.

(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 to:

(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.

(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) (from Ch. 32, par. 2.15)

Sec. 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) (from Ch. 32, par. 2.20)

Sec. 2.20. Organization of Corporation.

(a) If there are no preincorporation subscribers and if initial directors are not named in the articles of incorporation, a meeting of the incorporators shall be held at the call of a majority of the incorporators for the purpose of naming the initial directors.

(b) If there are preincorporation subscribers and if initial directors are not named in the articles of incorporation, the first meeting of shareholders 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 notice of the meeting.
(4) In lieu of a meeting, shareholder action may be taken by consent in writing pursuant to Section 7.10 of this Act.

(1) adopting by-laws if the shareholders have not adopted them;
(2) electing officers; and
(3) transacting such other business as may come before the meeting.

(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) (from Ch. 32, par. 2.25)

Sec. 2.25. By-laws. 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) (from Ch. 32, par. 2.30)

Sec. 2.30. Emergency by-laws. 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 purposes.

(Source: P.A. 85-1269.)

(805 ILCS 5/2.35) (from Ch. 32, par. 2.35)

Sec. 2.35. Meetings of the board of directors of a residential cooperative corporation shall be open to any residential shareholder, except for the portion of any meeting held (i) to discuss litigation when an action against or on behalf of the corporation has been filed and is pending in a court or administrative tribunal, or when the board of directors finds that such an action is probable or imminent, (ii) to consider information regarding appointment, employment or dismissal of an employee, or (iii) to discuss violations of rules and regulations of the corporation by a residential shareholder. Any residential shareholder may record by tape, film or other means the proceedings at such meetings or portions thereof required to be open by this Section. The board may prescribe reasonable rules and regulations to govern the right to make such recordings. Notice of such meetings shall be mailed or delivered at least 48 hours prior thereto, unless a written waiver of such notice is signed by the person or persons entitled to such notice pursuant to the articles of incorporation, bylaws, or other instrument before the meeting is convened. Copies of notices of meetings of the board of directors shall be posted in entranceways, elevators, or other conspicuous places in the residential cooperative at least 48 hours prior to the meeting of the board of directors. If there is no common entranceway for 7 or more apartments, the board of directors may designate one or more locations in the proximity of such units where the notices of meetings shall be posted. For purposes of this Section, "meeting of the board of directors" means any gathering of a quorum of the members of the board of directors of the residential cooperative held for the purpose of discussing business of the cooperative. The provisions of this Section shall apply to any residential cooperative situated in the State of Illinois regardless of where such cooperative may be incorporated.

(Source: P.A. 94-1099, eff. 2-2-07.)

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