Illinois Compiled Statutes
Information maintained by the Legislative Reference Bureau
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts
soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide
Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.
BUSINESS ORGANIZATIONS805 ILCS 5/7.90
(805 ILCS 5/) Business Corporation Act of 1983.
(805 ILCS 5/7.90)
(a) Unless otherwise provided in the articles of incorporation, a shareholder who executes and delivers to the corporation a written instrument irrevocably waiving the right (i) to vote any shares held by such shareholder, whether for the election of directors or otherwise, (ii) to be a director or officer of the corporation, and (iii) in any other manner to control, directly or indirectly, corporate actions or the election or removal of any director or officer of the corporation, and who at the time of such waiver is not a director or officer of the corporation, shall have no fiduciary duty to the corporation or any of its shareholders arising out of the fact that such person is a shareholder of the corporation. No such waiver shall affect any breach of fiduciary duty arising prior to the effective date of the waiver.
(b) The corporation shall give prompt notice of such waiver to the remaining shareholders, except that no such notice need be given by a corporation that has shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association.
(c) The waiver referred to in this Section shall not affect any other rights or obligations of the shareholder, including but not limited to the rights under Sections 7.80, 11.65, 11.70, 12.55 and 12.56 of this Act.
(d) Shares that cannot be voted because of a waiver under this Section shall not be counted in determining the number of shares necessary for a quorum or for shareholder action under Section 7.60 of this Act. A waiver under this Section shall not apply to any transferee of the shares.
(e) The waiver referred to in this Section is specifically enforceable in accordance with the principles of equity.
(f) This Section is not intended to describe or suggest the circumstances under which any fiduciary duty arises or exists, including with respect to any shareholder who fails to make a waiver under this Section.
(Source: P.A. 94-394, eff. 8-1-05.)
805 ILCS 5/Art. 8
(805 ILCS 5/Art. 8 heading)
DIRECTORS AND OFFICERS
805 ILCS 5/8.05
(805 ILCS 5/8.05)
(from Ch. 32, par. 8.05)
Board of directors.
(a) Except as provided in Article 2A of
this Act, each corporation
shall have a board of directors and the
business and affairs of the corporation shall be managed by or under the
direction of the board of directors.
(b) The articles of incorporation or by-laws may prescribe qualifications
for directors. A director need not be a resident of this State or a
of the corporation unless the articles of incorporation or by-laws so
(c) Unless otherwise provided in the articles of incorporation
or by-laws, the board of directors, by the affirmative vote of a majority
of the directors then in office, and irrespective of any personal interest
of any of its members, shall have authority to establish reasonable
compensation of all directors for services to the corporation as directors,
officers or otherwise, notwithstanding the provisions of Section 8.60.
(Source: P.A. 88-151.)
805 ILCS 5/8.10
(805 ILCS 5/8.10)
(from Ch. 32, par. 8.10)
Number, election and resignation of directors.
board of directors of a corporation shall consist of one or more members.
The number of directors shall be fixed by the by-laws, except the number
of initial directors shall be fixed by the incorporators in the articles
of incorporation or at the organizational meeting. In the absence of a
by-law fixing the number of directors, the number shall be the same as that
fixed in the articles of incorporation or at the organizational meeting.
The number of directors may be increased or decreased from time to time by amendment
to the by-laws.
(b) The by-laws may establish a variable range for the size of the board
by prescribing a minimum and maximum (which may not exceed the minimum by
more than five) number of directors. If a variable range is established,
the number of directors may be fixed or changed from time to time, within
the minimum and maximum, by the directors or the shareholders without further
amendment to the by-laws.
(c) The terms of all directors expire at the next annual shareholders'
meeting following their election unless their terms are staggered under
subsection (e). The term of a director elected to fill a vacancy expires
at the next annual shareholders' meeting at which his or her predecessor's
term would have
expired. The term of a director elected as a result of an increase in the
number of directors expires at the next annual shareholders' meeting unless
the term is staggered under subsection (e).
(d) Despite the expiration of a director's term, he or she continues to
serve until the next meeting of shareholders at which directors are elected.
A decrease in the number of directors does not shorten an incumbent director's term.
(e) If the board of directors consists of six or more members, in lieu
of electing the membership of the whole board of directors annually, the
articles of incorporation or by-laws may provide that the directors shall
be divided into either two or three classes, each class to be as nearly
equal in number as is possible. The term of office of directors of the
first class shall expire at the first annual meeting of shareholders after
their election, that of the second class shall expire at the second annual
meeting after their election, and that of the third class, if any, shall expire at the
third annual meeting after their election. At each annual meeting after
such classification, the number of directors equal to the number of the
class whose terms expire at the time of such meeting shall be elected to
hold office until the second succeeding annual meeting, if there be two
classes, or until the third succeeding annual meeting, if there be three classes.
(f) If the articles of incorporation authorize dividing the shares into
classes or series, the articles may also authorize the election of all or a specified
number or percentage of directors by the holders of one or more authorized
classes or series of shares.
(g) A director may resign at any time by giving written notice to the
board of directors, its chairman, or to the president or secretary of the
corporation. A resignation is effective when the notice is given unless
the notice specifies a future date. The pending vacancy may be filled before
the effective date, but the successor shall not take office until the effective date.
(Source: P.A. 83-1025.)
805 ILCS 5/8.12
(805 ILCS 5/8.12)
Female, minority, and LGBTQ directors.
(a) Findings and purpose. The General Assembly finds that women, minorities, and LGBTQ people are still largely underrepresented nationally in positions of corporate authority, such as serving as a director on a corporation's board of directors. This low representation could be contributing to the disparity seen in wages made by females and minorities versus their white male counterparts. Increased representation of these individuals as directors on boards of directors for corporations may boost the Illinois economy, improve opportunities for women, minorities, and LGBTQ people in the workplace, and foster an environment in Illinois where the business community is representative of our residents. Therefore, it is the intent of the General Assembly to gather more data and study this issue within the State so that effective policy changes may be implemented to eliminate this disparity.
(b) As used in this Section:
"Annual report" means the report submitted annually to the Secretary of State pursuant to this Act.
"Female" means a person who is a citizen or
lawful permanent resident of the United States and who self-identifies as a woman, without regard to the individual's designated sex at birth.
"Minority person" means a person who is a
citizen or lawful permanent resident of the United States and who is any of the following races or ethnicities:
(1) American Indian or Alaska Native (a person
having origins in any of the original peoples of North and South America, including Central America, and who maintains tribal affiliation or community attachment).
(2) Asian (a person having origins in any of the
original peoples of the Far East, Southeast Asia, or the Indian subcontinent, including, but not limited to, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam).
(3) Black or African American (a person having
origins in any of the black racial groups of Africa). Terms such as "Haitian" or "Negro" can be used in addition to "Black" or "African American".
(4) Hispanic or Latino (a person of Cuban,
Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race).
(5) Native Hawaiian or Other Pacific Islander (a
person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands).
(6) "Publicly held domestic or foreign corporation"
means a corporation with outstanding shares listed on a major United States stock exchange.
(c) Reporting to the Secretary of State. As soon as practical after August 27, 2019 (the effective date of Public Act 101-589), but no later than January 1, 2021, the following information shall be provided in a corporation's annual report submitted to the Secretary of State under this Act and made available by the Secretary of State to the public online as it is received:
(1) Whether the corporation is a publicly held
domestic or foreign corporation with its principal executive office located in Illinois.
(2) Where the corporation is a publicly held
domestic or foreign corporation with its principal executive office located in Illinois, data on specific qualifications, skills, and experience that the corporation considers for its board of directors, nominees for the board of directors, and executive officers.
(3) Where the corporation is a publicly held
domestic or foreign corporation with its principal executive office located in Illinois, the self-identified gender of each member of its board of directors.
(4) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office located in Illinois, whether each member of its board of directors self-identifies as a minority person and, if so, which race or ethnicity to which the member belongs.
(5) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office located in Illinois, the self-identified sexual orientation of each member of its board of directors.
(6) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office located in Illinois, the self-identified gender identity of each member of its board of directors.
(7) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office located in Illinois, a description of the corporation's process for identifying and evaluating nominees for the board of directors, including whether and, if so, how demographic diversity is considered.
(8) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office located in Illinois, a description of the corporation's process for identifying and appointing executive officers, including whether and, if so, how demographic diversity is considered.
(9) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office located in Illinois, a description of the corporation's policies and practices for promoting diversity, equity, and inclusion among its board of directors and executive officers.
Information reported under this subsection shall be updated in each annual report filed with the Secretary of State thereafter.
(d) Beginning no later than March 1, 2021, and every March 1 thereafter, the University of Illinois Systems shall review the information reported and published under subsection (c) and shall publish on its website a report that provides aggregate data on the demographic characteristics of the boards of directors and executive officers of corporations filing an annual report for the preceding year along with an individualized rating for each corporation. The report shall also identify strategies for promoting diversity and inclusion among boards of directors and corporate executive officers.
(e) The University of Illinois System shall establish a rating system assessing the representation of women, minorities, and LGBTQ people on corporate boards of directors of those corporations that are publicly held domestic or foreign corporations with their principal executive office located in Illinois based on the information gathered under this Section. The rating system shall consider, among other things: compliance with the demographic reporting obligations in subsection (c); the corporation's policies and practices for encouraging diversity in recruitment, board membership, and executive appointments; and the demographic diversity of board seats and executive positions.
(Source: P.A. 101-589, eff. 8-27-19; 102-223, eff. 1-1-22; 102-813, eff. 5-13-22.)
805 ILCS 5/8.15
(805 ILCS 5/8.15)
(from Ch. 32, par. 8.15)
Quorum of directors.
(a) A majority of the number of directors
fixed by the by-laws, or in the absence of a by-law fixing the number of
directors, the number stated in the articles of incorporation or named by
the incorporators, shall constitute a quorum for the transaction of business
unless a greater number is
specified by the articles of incorporation or the by-laws.
(b) If a corporation has a variable range board of directors, a quorum
shall consist of a majority of the directors then in office, but not less
than a majority of the minimum number of directors specified for the variable
range of the board unless the articles of incorporation or by-laws specify
a greater number.
(c) The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the board of directors, unless the
act of a greater number is required by the articles of incorporation or the by-laws.
(d) Unless specifically prohibited by the articles of incorporation or
by-laws, members of the board of directors or of any committee of the board
of directors may participate in and act at any meeting of such board or
committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can
hear each other.
Participation in such meeting shall constitute attendance and
presence in person at the meeting of the person or persons so
(Source: P.A. 83-1025.)
805 ILCS 5/8.20
(805 ILCS 5/8.20)
(from Ch. 32, par. 8.20)
Place of directors' meetings.
Regular or special
meetings of the board of directors may be held
either within or without this State.
(Source: P.A. 83-1025.)
805 ILCS 5/8.25
(805 ILCS 5/8.25)
(from Ch. 32, par. 8.25)
Notice of directors' meetings.
Meetings of the board of directors shall be held upon such notice as the
by-laws may prescribe. Attendance of a director at any meeting shall
constitute a waiver of notice of such meeting except where a director
attends a meeting for the express purpose of objecting to the transaction
of any business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting.
(Source: P.A. 83-1025.)
805 ILCS 5/8.30
(805 ILCS 5/8.30)
(from Ch. 32, par. 8.30)
Any vacancy occurring in the board of directors
and any directorship to be filled by reason of an increase in the number
of directors may be filled by election at an annual meeting or at a special
meeting of shareholders called for that purpose; provided, however, the
by-laws may provide a method for filling
vacancies arising between meetings of shareholders by reason of an increase
in the number of directors or otherwise, by director or shareholder action
and, in the absence of such a provision, the board of directors may fill
the vacancy. A director elected by the shareholders to fill a vacancy shall
hold office for the balance of the term for which he or she was elected. A director
appointed to fill a vacancy shall serve until the next meeting of shareholders
at which directors are to be elected.
(Source: P.A. 83-1025.)
805 ILCS 5/8.35
(805 ILCS 5/8.35)
(from Ch. 32, par. 8.35)
Removal of directors.
(a) One or more of the directors
may be removed, with or without cause, at a meeting of shareholders by the
affirmative vote of the holders of a majority of the outstanding shares
then entitled to vote at an election of directors, except as follows:
(1) No director shall be removed at a meeting of shareholders unless the
notice of such meeting shall state that a purpose of the meeting is to vote
upon the removal of one or more directors named in the notice. Only the
named director or directors may be removed at such meeting.
(2) In the case of a corporation having cumulative voting, if less than
the entire board is to be removed, no director may be removed, with or without
cause, if the votes cast against his or her removal would be sufficient to
elect him or her if then cumulatively voted at an election of the entire
board of directors.
(3) If a director is elected by a class or series of shares, he or she may
be removed only by the shareholders of that class or series.
(4) In the case of a corporation whose board is classified as provided
in subsection (e) of Section 8.10, the articles of incorporation may
provide that directors may be removed only for cause.
(b) The provisions of subsection (a) shall not preclude the circuit court
of the county in which the corporation's registered office is located from
removing a director of the corporation from office in a proceeding commenced
either by corporation or by shareholders of the corporation holding at least
10 percent of the outstanding shares of any class if the court finds (1)
the director is engaged in fraudulent or dishonest conduct or has grossly abused
his or her position to the detriment of the corporation, and (2) removal is in
the best interest of the corporation. If the court removes a director,
it may bar the director from reelection for a period prescribed by the court.
If such a proceeding is commenced by the shareholders, they shall make the
corporation a party defendant.
(Source: P.A. 84-924.)
805 ILCS 5/8.40
(805 ILCS 5/8.40)
(from Ch. 32, par. 8.40)
(a) If the articles of incorporation or by-laws
so provide, a majority of the directors may create one or more committees,
each to have one or more members, and
appoint members of the board to serve on the committee or committees.
A committee's members
shall serve at the pleasure of the
(b) Unless the appointment by the board of directors requires a greater
number, a majority of any committee shall constitute a quorum and a majority
of a quorum is necessary for committee action. A committee may act by
consent in writing without a meeting and, subject to the provisions of the
or action by the board of directors, the committee by majority vote of its
members shall determine the time and place of meetings and the notice required
(c) To the extent specified by the board of directors or in the articles
of incorporation or by-laws, each committee may exercise the authority of
the board of directors under Section 8.05; provided, however, a committee may
(1) authorize distributions, except for dividends to
be paid with respect to shares of any preferred or special classes or any series thereof;
(2) approve or recommend to shareholders any act this
Act requires to be approved by shareholders;
(3) fill vacancies on the board or on any of its
(4) elect or remove officers or fix the compensation
of any member of the committee;
(5) adopt, amend or repeal the by-laws;
(6) approve a plan of merger not requiring
(7) authorize or approve reacquisition of shares,
except according to a general formula or method prescribed by the board;
(8) authorize or approve the issuance or sale, or
contract for sale, of shares, except that the board may direct a committee (i) to fix the specific terms of the issuance or sale or contract for sale, including without limitation the pricing terms or the designation and relative rights, preferences, and limitations of a series of shares if the board of directors has approved the maximum number of shares to be issued pursuant to such delegated authority or (ii) to fix the price and the number of shares to be allocated to particular employees under an employee benefit plan; or
(9) amend, alter, repeal, or take action inconsistent
with any resolution or action of the board of directors when the resolution or action of the board of directors provides by its terms that it shall not be amended, altered or repealed by action of a committee.
(Source: P.A. 91-464, eff. 1-1-00.)
805 ILCS 5/8.45
(805 ILCS 5/8.45)
(from Ch. 32, par. 8.45)
Informal action by directors.
(a) Unless specifically prohibited by the articles of incorporation or
by-laws, any action required by this Act to be taken at a meeting of the
board of directors of a corporation, or any other action which may be taken
at a meeting of the board of directors or a committee thereof,
may be taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the directors entitled to vote
with respect to the subject matter thereof, or by all the members of such
committee, as the case may be.
(b) The consent shall be evidenced by one or more written approvals, each
of which sets forth the action taken and bears the signature of one or more
directors. All the approvals evidencing the consent shall be delivered
to the secretary to be filed in the corporate records. The action taken
shall be effective when all the directors have approved the consent unless
the consent specifies a different effective date.
(c) Any such consent signed by all the directors or all the members of
a committee shall have the same effect as a unanimous vote, and may
be stated as such in any document filed with the Secretary of State under
(Source: P.A. 83-1025.)
805 ILCS 5/8.50
(805 ILCS 5/8.50)
(from Ch. 32, par. 8.50)
A corporation shall have such officers as shall
be provided in the by-laws, each of whom shall be elected by the board
of directors at such time and in such manner as may be prescribed by the
by-laws. Officers and assistant officers and agents as may be
deemed necessary may be elected or appointed by the board of directors
or chosen in such other manner as may be prescribed by the by-laws. If
the by-laws so provide, any two or more offices may be held by the same
person. One officer, in this Act generally referred to as the secretary,
shall have the authority to certify the by-laws, resolutions of the shareholders
and board of directors and committees thereof, and other documents of the
corporation as true and correct copies thereof.
All officers and agents of the corporation, as between themselves and
the corporation, shall have such express authority and perform such duties in
the management of the property and affairs of the corporation as may be
provided in the by-laws, or as may be determined by resolution of the
board of directors not inconsistent with the by-laws and such implied authority
as recognized by the common law from time to time.
(Source: P.A. 83-1025.)
805 ILCS 5/8.55
(805 ILCS 5/8.55)
(from Ch. 32, par. 8.55)
Removal of officers.
Any officer or agent may be removed by the board of directors whenever
in its judgment the best interests of the corporation will be served
thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an
officer or agent shall not of itself create contract rights.
(Source: P.A. 83-1025.)
805 ILCS 5/8.60
(805 ILCS 5/8.60)
(from Ch. 32, par. 8.60)
Director conflict of interest.
(a) If a transaction is
fair to a corporation at the time it is authorized, approved, or ratified,
the fact that a director of the corporation is directly or indirectly a
party to the transaction is not grounds for invalidating the transaction or
the director's vote regarding the transaction; provided, however, that in a
proceeding contesting the validity of such a transaction, the person asserting
validity has the burden of proving
(1) the material facts of the transaction and the
director's interest or relationship were disclosed or known to the board of directors or a committee of the board and the board or committee authorized, approved or ratified the transaction by the affirmative votes of a majority of disinterested directors, even though the disinterested directors be less than a quorum; or
(2) the material facts of the transaction and the
director's interest or relationship were disclosed or known to the shareholders entitled to vote and they authorized, approved or ratified the transaction without counting the vote of any shareholder who is an interested director.
(b) For purposes of this Section, a director is "indirectly" a party to
if the other party to the transaction is an entity in which the director
has a material financial interest or of which the director is an officer,
director or general partner.
(Source: P.A. 90-421, eff. 1-1-98.)
805 ILCS 5/8.65
(805 ILCS 5/8.65)
(from Ch. 32, par. 8.65)
Liability of directors in certain cases.
(a) In addition
to any other liabilities imposed by law upon directors of a corporation,
they are liable as follows:
(1) The directors of a corporation who vote for or
assent to any distribution prohibited by Section 9.10 of this Act shall be jointly and severally liable to the corporation for the amount of such distribution.
(2) If a dissolved corporation shall proceed to bar
any known claims against it under Section 12.75, the directors of such corporation who fail to take reasonable steps to cause the notice required by Section 12.75 of this Act to be given to any known creditor of such corporation shall be jointly and severally liable to such creditor for all loss and damage occasioned thereby.
(3) Unless dissolution is subsequently revoked
pursuant to Section 12.25 of this Act, the directors of a corporation that carries on its business after the filing by the Secretary of State of articles of dissolution with respect to a voluntary dissolution authorized as provided by this Act, otherwise than as necessary or appropriate to wind up and liquidate its business and affairs, shall be jointly and severally liable to the creditors of such corporation for all debts and liabilities of the corporation incurred in so carrying on its business. Directors of a corporation that carries on its business during a period of administrative dissolution shall not be liable under this paragraph (a)(3) if the Secretary of State subsequently files an application for reinstatement under subsection (c) of Section 12.45, which reinstatement shall have the effect described in subsection (d) of Section 12.45.
(b) A director of a corporation who is present at a meeting of its board of
directors at which action on any corporate matter is taken is conclusively
presumed to have assented to the action taken unless his or her dissent
is entered in the minutes of the meeting or unless he or she files his or
her written dissent to such action with the person acting as the secretary
of the meeting before the adjournment thereof or forwards such dissent by
registered or certified mail to the
secretary of the corporation immediately after the adjournment of the
meeting. Such right to dissent does not apply to a director who voted in
favor of such action.
(c) A director shall not be liable for a
distribution of assets to the shareholders of a corporation in excess of
the amount authorized by Section 9.10 of this Act if he or she relied and
acted in good faith
upon a balance sheet and profit and loss statement of the corporation
represented to him or her to be correct by the president or the officer of such
corporation having charge of its books of account, or certified by an
independent public or certified public accountant or firm of such
accountants to fairly reflect the financial condition of such corporation,
nor shall he or she be so liable if in good faith in determining the amount
available for any such dividend or distribution he or she considered the
assets to be of their book value.
(d) Any director against whom a claim is asserted under this
Section and who is held liable thereon, is
entitled to contribution from the other directors who are likewise liable
Any director against whom a claim is asserted
for the improper
distribution of assets of a corporation and who is held
liable thereon, is entitled to contribution from the shareholders who
knowingly accepted or received any such distribution in proportion
to the amounts received by them respectively.
(Source: P.A. 98-776, eff. 1-1-15
805 ILCS 5/8.70
(805 ILCS 5/8.70)
(from Ch. 32, par. 8.70)
Kickbacks, bribes, etc.
-Liability of officers or directors.
Any Corporate director or officer who commits commercial bribery or commercial bribe
receiving as defined in Article 29A of the Criminal Code of 2012, shall
be liable to the corporation which he or she serves as officer or director for
treble damages, based on the aggregate amount given or received plus attorneys'
fees. A conviction in a criminal proceeding for a commercial bribery or
commercial bribe receiving shall be deemed prima facie evidence of the convicted
director's or officer's liability under this Section.
(Source: P.A. 97-1150, eff. 1-25-13.)