Illinois corporate bylaws establish the rules and structure for a corporation’s internal affairs. They define the roles and responsibilities of officers and directors and outline meeting policies, quorum requirements, and voting procedures.
Although not filed with the state, they are essential for outlining how to handle emergencies, make amendments, and manage day-to-day operations.
Legal Requirements
Corporate bylaws are required in Illinois [1] .
- Annual Meetings – Annual meetings of shareholders may be held at any time established by the corporation’s bylaws. If an annual meeting is not held within 15 months of the prior meeting, a shareholder may apply to the court to order the meeting to be held [2] .
- Corporate Bylaws – The company’s bylaws provide for the general rules of operation. Bylaws may generally be amended by either the shareholders or the Board of Directors unless the bylaws provide otherwise [3] .
- Issuance of Stock – The Board of Directors may issue shares of stock for payment of consideration, either in the form of tangible or intangible property. The value of a company’s shares, as determined by the Board, is conclusive in the absence of fraud [4] .
Naming Considerations
- Required Words: “Corporation,” “Company,” “Incorporated,” “Limited” or an abbreviation thereof.
- Prohibited Words: Corporations are prohibited from using specific language that can be misleading. This language includes stating or implying that the corporation is authorized or empowered to conduct the business of insurance, assurance, indemnity, or the acceptance of savings deposits. Corporations are also prohibited from stating or implying that they are engaged in banking unless permitted by the Commissioner of Banks and Real Estate under the Illinois Banking Act. Additionally, corporations cannot claim that they are a government agency or affiliated with a government agency. Corporations need to avoid using such language to ensure transparency and clarity in their communications.
- Name Reservation Period: 90 days.
- Renewal Period: Statute silent.
- Transferability: Yes.
Emergency Bylaws
In case of a catastrophic emergency that prevents a quorum of directors from attending a meeting, the board of directors can adopt emergency bylaws. These bylaws facilitate the corporation to continue its operations until the situation is resolved, after which they become ineffective. Officers, directors, agents, and employees are shielded from liability for good faith decisions made under emergency bylaws [5] .
