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Are bylaws required in Illinois?
Yes, corporations in Illinois must formally pass their bylaws during the initial board meeting.[1]
Illinois Corporate Laws
- Corporate Tax: There is a 9.5% corporate income tax rate in Illinois.[2][3]
- Board: Generally, Illinois corporations must function “under the direction” of their board of directors.[4]
- Number – After the initial meeting, the bylaws fix the number of directors and allow for increases or decreases through ” amendments to the bylaws.”[5]
- Qualifications – Directors “need not” be state residents or shareholders of the corporation to be qualified; however, the bylaws may add these requirements as well others.[6]
- Terms – Once elected, a director’s term is in effect until the next election, so long as they are compliant with the by-laws. [7]
- Staggered Elections – The by-laws (or articles) divide directors into different classes to stagger elections; however, “the terms of office of several classes need not be uniform.” [8]
- Fiduciary Duty – The board of directors, as well as their committees, act in the “best long-term and short-term interest of the corporation.” [9]
- Meetings: The procedures for notifying directors on board meetings are set “as the by-laws may prescribe.” [10]
- Officers: The process to elect officers, assistant officers, and agents is defined by the bylaws; however, at least one officer, “referred to as the secretary,” must be charged with verifying documents and bylaw provisions.[11]
- Quorum: By-laws place requirements for a quorum, but if not, it will consist of “a majority of the directors then in office.” [12]
- Emergency Bylaws: By-laws that go into effect specifically during an emergency, such as “the declaration of a civil defense emergency by the President of the United States,” must be approved by a majority of voting shares. [13]